Summary
NIKE, Inc. reported its third-quarter fiscal year 2020 results, showing a 5% increase in revenues to $10.1 billion, reaching $31.1 billion for the nine-month period. This growth was primarily driven by the NIKE Brand, with strong performance in EMEA, North America, and Asia Pacific & Latin America, while Greater China experienced a decline due to COVID-19 impacts. The company's direct-to-consumer (NIKE Direct) channel continued its robust growth, particularly digital commerce. However, net income for the quarter saw a significant decrease of 23% to $847 million, primarily due to a $400 million non-recurring impairment charge related to the planned divestiture of its businesses in Brazil, Argentina, Chile, and Uruguay. The company also incurred higher selling and administrative expenses and a decline in gross margin. The report highlights NIKE's proactive response to the emerging COVID-19 pandemic, including store closures and the prioritization of employee safety, alongside the continued strength of its digital channels. The company is navigating significant uncertainties but is focused on long-term growth strategies and optimizing its operating model. Despite the short-term profit dip caused by the impairment charge and COVID-19 related costs, the underlying revenue trends and the strong performance of the NIKE Direct channel suggest resilience.
Financial Highlights
48 data points| Revenue | $10.10B |
| Cost of Revenue | $5.63B |
| Gross Profit | $4.47B |
| SG&A Expenses | $3.28B |
| Net Income | $847.00M |
| EPS (Basic) | $0.54 |
| EPS (Diluted) | $0.53 |
| Shares Outstanding (Basic) | 1.56B |
| Shares Outstanding (Diluted) | 1.59B |
Key Highlights
- 1Total revenues increased by 5% to $10.1 billion for the third quarter and 7% to $31.1 billion for the first nine months of fiscal 2020.
- 2The NIKE Brand reported a 5% revenue increase in Q3 and 7% for the nine-month period, driven by growth in EMEA, North America, and APLA, offset by a decline in Greater China.
- 3NIKE Direct revenues grew by 13% on a currency-neutral basis for the quarter, with digital commerce sales up 36%, demonstrating continued strength in direct consumer engagement.
- 4Net income for the third quarter decreased by 23% to $847 million, significantly impacted by a $400 million non-recurring impairment charge related to planned divestitures in South America.
- 5Gross margin declined by 80 basis points in the third quarter, primarily due to unfavorable impacts from COVID-19, including a lower mix of sales from Greater China and increased rebates to wholesale partners.
- 6Selling and administrative expenses increased by 6% in the quarter, driven by investments in data analytics, digital transformation, and enterprise resource planning tools.
- 7The company is actively managing the impacts of the COVID-19 pandemic, including store closures and supply chain adjustments, while noting a recovery in Greater China and continued strong digital demand.