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Home / Business / Nike reports for the third quarter of fiscal year 2019

Nike reports for the third quarter of fiscal year 2019



Nike stock tumbled after Thursday's bell after the sneaker maker reported weaker-than-expected sales in the third quarter of the third quarter, driven by fewer people buying Converse branded goods.

1 billion US dollars vs. $ 9.612 billion expected

"Our business momentum is accelerated by our ability to scale innovations faster and expand new digital customer experiences around the world." CEO Mark Parker said. The company also called for "continued momentum in China," a geography that is said to be "bullish" despite uncertainty over tariffs.

"We have great momentum in China, but the long-term opportunity is far from clear in this market," CFO Andy Campion told the analysts.

Nike's net income was $ 1.1 billion, or 68 cents a share, compared to a net loss of $ 921 million or a loss of 57 cents a share a year ago. Earnings per share were 3 cents above analyst expectations based on a survey by Refinitiv.

Sales increased 7 percent to $ 9,611 million for the quarter compared to $ 8,984 million a year earlier. That corresponded to the expectations of the analysts. It was the first time in six quarters that Nike did not exceed expectations.

Converse shoe sales declined 2 percent to $ 463 million, mainly due to declines in the US and Europe.

In North America, sales increased 7 percent to $ 3.81 billion (excluding currency changes). It was a gentler growth than some people expected. Telsey Advisory Group analyst Cristina Fernandez called for a 10% increase in North America in the third quarter.

In Europe, the Middle East and Africa, net sales increased 12 percent, Nike said. In China, sales increased by 24 percent. And in Asia-Pacific and Latin America, sales increased 14 percent as Nike's overseas business continues to grow faster than in the US, where the competition from Adidas, Under Armor and Vans remains saturated.

Nike said its digital business has grown 36 percent as it continues to invest in online initiatives such as mobile apps and customer customization options. The company said shoppers are shopping their Nike retail app for an average of 40 percent higher sales than those who do not.

The "Snkrs" app, which sells limited edition shoes through collaboration with athletes, has generated more traffic and sales. Celebrities and universities – climbed in three digits during the quarter.

Hoping to further expand the momentum of his brand, Nike's focus has been on wholesale partners so that he now sells as much as possible directly to consumers through his own stores and website. This is evidenced by Nike's recent openings, including a high-tech New York location on Fifth Avenue and a new, smaller store being tested in Los Angeles. Meanwhile, Nike's online business is strong as it innovates with new products – such as the Air Max 720 and Epic React Flyknit 2 – and the exclusive product launches that drive traffic to the site.

"The Innovation Pipeline is a great trust at Nike, and we are very confident that we will continue to win over consumers over the next few years," Parker said in the future. For women, it brings other products such as yoga pants and sports bras in expanded sizes on the market. The company said Jordan's women's business is growing at double digits from the third quarter, and women are "excited" sneaker culture is becoming more and more every day. "

Meanwhile, Nike may have benefited from sales of rival sneaker maker Adidas in North America, with Adidas announcing that" supply chain bottlenecks "will hit the market in 2019.

" We expect that due to Nike's superior product platform is facing further erosion of its shares [at Adidas]"said Jefferies analyst Randal Konik ahead of Thursday's report.

A cloud hangs over Nike ahead of Thursday's results: The company has recently been involved in controversy, When Zion Williamson, the star basketball player at Duke University, blew through his Nike sneakers during a basketball match and sprained his knee, Nike stocks fell after the debacle, and the company responded by bringing a team of sneaker designers to Duke in North Carolina and then sent to China to make a new shoe for Williamson, who since his return to basketball w had to do some games with his injury.

However, during the conference call on Thursday, Williamson was not mentioned.

According to Nike, 9.8 million shares worth $ 754 million were repurchased in the current quarter.

At the close on Thursday, Nike stock gained more than 30 percent in the last 12 months. The stock has risen by almost 18 percent this year.


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