Nike warns on subdued Q4 results amid Covid-19 lockdown

Sport fashion retailer Nike has warned this its fourth quarter sales will be impacted by the Covid-19 lockdown.

Since mid-March, the vast majority of Nike-owned and wholesale partner stores outside Greater China and South Korea have been completely closed in order to protect the health and safety of staff and help slow the spread of the coronavirus.

As a result of these store closures, product shipments to wholesale customers has slowed resulting in “significantly” lower wholesale revenue and higher inventory. Nike said that it continues to expect this to have a material impact on its Nike Direct and wholesale operations in North America, EMEA and APLA in its Q4 results.

Despite this, store reopenings have begun in over 15 countries including Germany, France, the Netherlands, Brazil and the United States.

Roughly 40% of our Nike-owned stores in EMEA, 15% in APLA and 5% in North America are now open, with some operating with reduced hours. Its wholesale partners in these countries have also begun to re-open stores.

Nike said it remains focused on prioritising the health of our teammates and consumers and continues to follow the advice and direction of local health authorities and governments.

In preparation for stores reopening, it has taken “appropriate steps” to help ensure a safe retail environment including implementing social distancing and traffic control measures, increased product and facility sanitization, as well as providing face coverings to retail employees.

John Donahoe, president and CEO of Nike, said: “We are encouraged by the recovery we are seeing in Greater China and South Korea as we continue to deepen our connection to consumers,” said John Donahoe, President and CEO of NIKE, Inc.

“Even more so, consumers around the world are recognizing the need for an active and healthy lifestyle and sport is now more meaningful than ever. With our strong digital foundation, brand momentum and financial position, we believe this will be a catalyzing moment that strengthens NIKE’s long-term future.”