In the context of the evolving dynamics related to the coronavirus in China, Nike Inc. said it is prioritizing the health and safety of its store associates and partners, in cooperation with local authorities. Similar to others in the marketplace, approximately half of Nike-owned stores have been temporarily closed, with corresponding dynamics across its partner stores.
In addition, Nike said it is operating with reduced hours and experiencing lower than planned retail traffic in stores that do remain open. In the short term, Nike said it expects the situation to have a “material impact” on its operations in Greater China; however, Nike’s brand and business momentum with the Chinese consumer remains strong, as reflected in the continued strength of its Nike digital commerce business.
Nike said that despite this difficult situation, Nike’s “long-term opportunity to continue to serve consumers in Greater China with inspiration and innovation remains exceedingly strong. At the same time, we continue to have extraordinary brand and business momentum in all other geographies.”
John Donahoe, president and CEO of Nike, Inc., said in a statement, “First and foremost, our thoughts are with the people affected, and we remain focused on the health and safety of our teammates and partners. Despite this difficult situation, Nike’s long-term opportunity to continue to serve consumers in Greater China with inspiration and innovation remains exceedingly strong. At the same time, we continue to have an extraordinary brand and business momentum in all other geographies.”*
This situation was not contemplated at the time Nike provided Q3 guidance during its Q2 fiscal year 2020 earnings call. Dynamics continue to evolve and accordingly, Nike said it will provide an update on the operational and financial impacts on its Q3 earnings call.
Photo courtesy Nike
