On February 17, 2020, a man wearing a mask passes in front of a Nike store in the central business district of Beijing, China.
Andrea Verdelli | Getty Images
Shares of Nike fell on Friday, after the company reported mixed earnings in the third quarter on Thursday afternoon and confirmed it was laying off employees.
Shares fell about 4% at noon. The shares have gained more than 95% over the past year and have a market value of $ 217 billion.
Nike did not disclose job cuts in its earnings report on Thursday nor did it call investors. The Oregonian, which covers the Portland area sneaker company, first reported the layoffs.
Nike said the cuts follow the layoffs that began last summer. As of May 31, 2020, Nike employed about 75,400 workers worldwide, according to a document filed with the Securities and Exchange Commission.
In a prepared statement, Nike was “focused on changing resources and creating capacity to reinvest in our growth areas with the most potential.”
“We are building a flatter, more agile business and transforming Nike more quickly to define the market of the future,” he said.
On Thursday, the sportswear retailer said its revenue fell 10 percent year-over-year in North America during its third fiscal quarter ended Feb. 28, as backward ports delayed shipments. This caused the merchandise to arrive weeks late in its own stores and those of its wholesale partners, such as department stores and sporting goods outlets, and increased the risk of it ending up on the shelf.
Nike said sales at its stores in Europe, the Middle East and Africa fell during the quarter due to pandemic-related closures and restrictions.
“The good news here is that supply chain problems will diminish in the coming quarters, while Europe will reopen over time as the vaccine spreads,” said Randal Konik, an analyst at Jefferies. in a research note. Konik values that Nike shares a position with a target price of $ 140.
Nike pointed to bright spots such as the growth of its direct consumer business, the boost in China and strong online sales. The company said it reached its first quarter with $ 1 billion in online sales in North America as consumers purchased new sneakers and workout clothes during their stay at home. Sales increased 51% in Greater China. And the company said it expects a similar resurgence in sales as other countries recover from the pandemic.