Nike says online sales offsetting slack or non-existent store sales
Nike Inc. late Thursday updated investors on store closures, saying that strong online sales are picking up the slack for sluggish or non-existent store sales. More than 95% of its stores in China and South Korea are open, with some still operating with reduced hours, Nike said. Foot traffic in these countries remain below past years, but that has been offset by higher conversion rates and online sales. Outside China and South Korea, most Nike stores are closed to help slow the spread of the coronavirus. That has resulted in "significantly lower" wholesale revenue and higher inventory, Nike said. "Strong digital demand" has countered that, Nike said. "We have increased our digital fulfillment capacity to meet this higher than anticipated demand which is partially offsetting declines in Nike-owned stores," it said. Some stores in countries such as Brazil, France, Germany, and the United States have reopened, with some also operating with reduced hours. In preparation for more reopenings, Nike has implemented social distancing and traffic control measures, provided extra product and facility cleanliness, and given face coverings to its retail employees, it said. "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," the company said. Nike is expected to report earnings in early June. Nike shares rose 0.2% in the extended session Thursday after ending the regular trading day up 0.6%.
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