China failed Nike
Profit Nike Inc. in the 1st financial quarter fell by 12%. Profit pressure was exerted by marketing expenses of the world's largest manufacturer of sports goods, as well as a slowdown in China's economic growth.
Shares fell in price by 2,1% to $ 93,81 in the hours after the end of the regular trading session on 27 September. Securities crashed by about 30% in almost 5 months from when they rose to record highs in May. The lower margins offset the impact of Nike’s efforts to increase revenue.
Nike has recently started grappling with some of its problems. The company has been striving to improve margins for about 2 years now, making it difficult for it to continually innovate to create products that appeal to the public. In the last reporting period, the gross margin declined by 0,8% to 43,5%. The company itself predicted that the margin would decline by 1%.
Higher materials and labor costs offset the effects of rising prices and steps to reduce production costs. In addition, margin was pressured by a decline in sales towards less profitable businesses, as well as a shift to Converse direct sales in China.
Inventories increased by 9,8%, which is much lower than the rapid growth by 20% in the comparable quarter last year.
Nike overheads jumped 18%. In particular, there was a 29% increase in “spending on demand stimulation” to promote products on the market and maintain the company's reputation at the Olympic Games and at the European Football World Cup. All of this kept the pressure on the company's profits.
Worldwide orders for future periods - a key indicator of growth - increased by 6-8% unadjusted for currency fluctuations. A year earlier, this indicator showed a significant increase - by 16%, the current figures indicate the weakest percentage growth in orders in more than two years. Analysts predicted only a decrease in the potential for growth in orders for future periods during the year, but Thursday's results signal a slower-than-expected growth.
A particularly strong slowdown in sales growth is observed in China. Nike sales in this country increased by 8%, or by 7%, excluding changes in exchange rates. For the first time in more than 2 years, both indicators were in the 0-9% range, while demonstrating a moderate improvement over the same period a year earlier.
Analysts note the stability of Nike's position in China, but the company faces problems due to the slowdown in the country's economy, intensive advertising of local brands and an increased tendency to buy casual clothes.
Nike's revenue growth was strong, especially in the company's largest sales market, North America, where sales grew 23%.
In the quarter ending August 31, Nike posted $ 567 million, or $ 1,23 per share, versus $ 645 million, or $ 1,36 per share a year earlier. Based on the results of the Cole Haan and Umbro businesses that the company plans to sell, earnings were $ 1,27 per share. Analysts polled by Thomson Reuters expected it to be at $ 1,12.
Revenue grew by 9,7% to $ 6,7 billion, or by 15% excluding currency fluctuations. In June, Nike predicted sales growth at the top of the 0-9% range. At that time, this forecast was lower than Wall Street estimates. About this writes asiareport.ru.
Profit Nike Inc. in the first financial quarter fell by 12%. Profits were under pressure from marketing costs for the world's largest sporting goods manufacturer, as well as a slowdown in the economic ...
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The largest international exhibition of footwear, bags and accessories EURO SHOES premiere collection will take place from 24 to 27 August in the capital's event hall MAIN STAGE
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Japanese brand of massage shoes Kenkoh enters the Russian market
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AXA SHOES presents innovative and very comfortable indoor shoes from Italy
Who among us has not looked for comfortable indoor shoes? Household slippers that would fit on the leg, did not sting, did not rub, it is very difficult to find. And those who have found the slippers of their dreams for themselves can consider themselves to be truly lucky! We propose to change the statistics and increase the number of lucky people per square kilometer of our country exponentially.And all because we have what you are looking for and so rarely find. These are your dream sneakers!
We bring to your attention the Italian home slippers AXA SHOES.
The Tamaris Experience
The independent entry of a foreign brand into the Russian market is always associated with certain risks and pitfalls, which not everyone knows about. Omitting the bureaucratic and legal intricacies of discoveries, the main one is the risk of delay in equipment deliveries, difficulties in construction control and other problems. In this article, we would like to reveal the topic of why it is profitable for a foreign brand to open with the participation of a local equipment supplier.
TRIEN shoes at EuroShoes.Market
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Truth and myths about TikTok. The five most common misconceptions about this unique social network
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Crocs releases collaboration with Little Big
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Men's footwear range for fall-winter 2021/22
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Online meetings with Brazilian shoe manufacturers
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Design rules for a shoe and accessories store
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Lillian Roor, ARA Sales Director in Russia: “ARA Shoes strives to be the most high-tech manufacturer of fashionable footwear.
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Pandemic-influenced visual merchandising transformation for shoe and accessories store
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Spotted shoes. New reading
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"FOOTWEAR OF RUSSIA" is already on EUROSHOES.MARKET
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EURO SHOES is the only exhibition of European brands in RUSSIA!
Dear buyers and visitors of the exhibition!
When to close the store? Or change the location with a reduction in retail space?
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The only exhibition of European shoe brands Euro Shoes Premiere Collection in Russia will be held in Moscow from 24 to 27 August 2021 at the Main Stage
Large international shoe brands from Italy, Germany, Spain, Turkey, Poland, Portugal will present their collections for the spring-summer 2022 season.
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MARCO TOZZI collection spring-summer 2021
MARCO TOZZI is constantly working to improve the quality, comfort, progressiveness of collections in terms of current fashion trends. We have done a tremendous job and put a lot of effort under the conditions of the "World Quarantine" in order to provide our regular and new promising clients with a balanced, commercial and very fashionable SPRING-SUMMER 2021 collection.
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Related products are an obligatory component of the assortment set of a shoe store. Accessories, insoles, shoe care products will surely add variety to store shelves and bring joy to your customers. With the right approach, the soputka can bring from 10% to 20% of the turnover, which in the current conditions can greatly support the retail business. How and what to sell correctly, how to form an accompanying assortment offline and online, as well as how long masks and sanitizers have been registered in stores, we talk with a representative of the brands BNS Bergal, Nico & Solitaire in Russia, Yulia Belkina, a participant of the Euro Shoes Premiere Collection exhibition ...
TAMARIS SS'21 COLLECTIONS
In the new spring-summer 2021 season, the German brand Tamaris, in addition to the main collection, will present four capsule lines: Tamaris Fashletics, Heart & Sole, PureRelax and GreenStep. Admirers of high-quality and stylish footwear will surely find suitable models among the wide range of the brand.
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Sales of shoes and accessories: effective techniques for business rhetoric
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We form the salary of sellers: expert advice
“How do you charge your consultants for personal or general sales?” Is one of the most popular questions causing a lot of controversy and gossip on the online forums of retail business owners. Indeed, how to properly form the earnings of sellers? But what about bonuses, where to get a sales plan from, do employees allow them to buy goods at discounted stores? In search of truth, the Shoes Report turned to a dozen shoe retailers, but no company wanted to disclose its motivation system - the process of its development was too complicated and individual. Then we asked four business consultants, and finally became convinced that the topic of seller motivation is very complex, because even our experts could not come to a common opinion.
Fur, and not only: types of lining
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How to fire a worker without tears, scandal and trial
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Retail Arithmetic
Before you begin to solve specific problems, you need to find out how accurately all the leaders of your company understand the basic terminology of retail.
The best models of Czech shoes of the past
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Ecommerce Laws Every Seller Should Know
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The whole truth about Bayer. Who is he and how to become one?
Bayer is no longer a new, but still a popular and sought-after profession. It’s fashionable to be a buyer. Buyers are at the origins of the emergence and development of trends. If the designer offers his vision of fashion in the season, then the buyer selects the most interesting commercial ideas. It is on buyers that the policy of sales of stores and what, in the end, the buyer will wear depends on. This profession is surrounded by a magical fleur, often associated with a lack of understanding of what exactly is the work of a buyer.
