Nike’s Quarterly China Revenue Tumbles 20% Amid Covid-19
Dou Shicong
DATE:  Jun 28 2022
/ SOURCE:  Yicai
Nike’s Quarterly China Revenue Tumbles 20% Amid Covid-19 Nike’s Quarterly China Revenue Tumbles 20% Amid Covid-19

(Yicai Global) June 28 -- Nike reported a 20 percent drop in revenue from China in its fiscal fourth quarter, as a large chunk of the sports goods giant’s business in the country was stymied by Covid-19 outbreaks.

Revenue was USD1.56 billion in the three months ended May 31, versus USD1.93 billion a year earlier, the Oregon-based sports goods giant said in a statement yesterday.

More than 60 percent of Nike’s business in China was affected by Covid-19 shutdowns, and its central logistics center in the country needed three weeks to return to normal capacity, Bloomberg News reported today.

Nike’s revenue from China has fallen for three consecutive quarters after it announced in March 2021 to stop using cotton made in the country’s Xinjiang Uygur Autonomous Region because of the alleged use of forced labor in the production of cotton.

But Nike still sees China as a long-term growth market and will continue to invest in the region, Bloomberg said, citing executives who spoke during the firm’s earnings conference call.

Next month, Nike will initiate a digital transition in China to build online platforms closer to the needs of Chinese consumers, it said early this month. The firm’s running app Nike Run Club will stop services in the Chinese mainland from July 8 amid the transition.

Nike’s total quarterly revenue fell 1 percent to USD12.2 billion, as the decline in revenue from China offset growth in other markets, the company said. Net profit dropped 5 percent to USD1.4 billion, with the gross margin down 80 basis points to 45 percent, mostly because of the higher inventory obsolescence reserves and freight and logistics costs in China.

For the full fiscal year 2022, Nike posted USD7.5 billion in revenue from China, down 13 percent from a year ago. The firm’s total revenue was USD46.7 billion, up 5 percent. Total net profit rose 6 percent to USD6 billion.

Editor: Futura Costaglione

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Keywords:   Nike,Covid-19,Revenue Decline