NIKE, Inc. Provides COVID-19 Update on Operations
May 14 2020 - 4:15PM
Business Wire
As of today, 100 percent of NIKE-owned stores and over 95
percent of partner stores in Greater China and South Korea are
open, with some still operating with reduced hours. In these
markets, retail traffic trends are progressing and while physical
store traffic remains below prior year levels, this is largely
offset by higher conversion rates and continued strong digital
demand.
“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.”*
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 our
employees and help slow the spread of COVID-19. In light of store
closures, product shipments to wholesale customers have slowed
resulting in significantly lower wholesale revenue and higher
inventory. We continue to expect this to have a material impact on
our NIKE Direct and wholesale operations in North America, EMEA and
APLA in the fourth quarter.*
In the midst of the widespread physical store closures, we have
been connecting and engaging with consumers leveraging the breadth
of our digital ecosystem. Our strong digital footprint and
capabilities are serving us well. We are seeing accelerated new
member acquisition and strong digital demand across the global
marketplace, with increased traffic and engagement on our mobile
commerce and activity apps. We have increased our digital
fulfillment capacity to meet this higher than anticipated demand
which is partially offsetting declines in NIKE-owned stores.
We have gradually reopened a small number of NIKE-owned stores
across North America, EMEA and APLA as states and countries within
each of these geographies ease quarantine measures and begin
marketplace recovery. Specifically, store reopening has begun in
over 15 countries including Germany, France, the Netherlands,
Brazil and the United States. As of today, roughly 40 percent of
our NIKE-owned stores in EMEA, 15 percent in APLA and 5 percent in
North America, are open with some operating with reduced hours. Our
wholesale partners in these countries have also begun to re-open
stores.
We remain focused on prioritizing the health of our teammates
and consumers and continue to follow the advice and direction of
local health authorities and governments. In preparation for stores
reopening, we have 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. In addition, we have maintained cleaning measures and
social distancing policies in our distribution centers.
We are operating in a dynamic environment which will continue to
evolve. Furthermore, the full extent of the impact of the COVID-19
pandemic on NIKE’s operational and financial performance remains
uncertain and will depend on many factors outside of NIKE’s
control. Additional updates will be provided during our fourth
quarter earnings call.*
About NIKE, Inc.
NIKE, Inc., based near Beaverton, Oregon, is the world's leading
designer, marketer and distributor of authentic athletic footwear,
apparel, equipment and accessories for a wide variety of sports and
fitness activities. Converse, a wholly-owned NIKE, Inc. subsidiary
brand, designs, markets and distributes athletic lifestyle
footwear, apparel and accessories. For more information, NIKE,
Inc.’s earnings releases and other financial information are
available on the Internet at http://investors.nike.com. Individuals
can also visit http://news.nike.com and follow @NIKE.
* This press release contains forward-looking statements that
involve risks and uncertainties, including statements regarding our
ability to respond to the COVID-19 pandemic and its impact on our
operational and financial performance. These risks and
uncertainties are detailed in reports filed by NIKE with the U.S.
Securities and Exchange Commission (SEC), including Forms 8-K, 10-Q
and 10-K.
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