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North American Demand Was Weak And Nike Sales Fell In The First Quarter

Oct 18, 2017

Nike's shares fell 3.58 percent to $51.78 in the U.S. on Sept. 26, after the U.S. sporting goods giant reported flat first-quarter sales and a decline in earnings.

 


First-quarter earnings fell 24 percent to $950 million, while gross margins fell 180 basis points to 43.7 percent, while total group revenue was flat at $9.1 billion.

 


As of the end of August 3 months, net income $1.25 billion fell 24% from a year ago, to $950 million, for selling and administrative expenses reduce was gross margin decline, other effective tax rate and the growth of other expenses offset.

 


Gross interest rate fell 180 basis points to 43.7%, mainly due to adverse changes in the foreign exchange rate, followed by higher commodity discount combinations.

 


The company's total revenue was flat at $9.1 billion, based on the release of a neutral currency.

Calculation based on currency neutral drive for greater China, Europe, Middle East and Africa (EMEA), Asia Pacific and Latin America (APLA), and other areas of growth, including the sports apparel, Nike brand sales of $8.6 billion, up 2% year-on-year.

 


Meanwhile, Converse's sales dropped 16% to $463 million, largely due to declining sales in North America.

 


The group's north American operations saw sales fall 3 per cent to $3.92bn while EMEA sales rose 4 per cent to $2.34 billion.

Meanwhile, sales in greater China rose 9 percent to $1.11 billion, while APLA's sales rose 5 percent to $1.19 billion.

 


CEO Mark Parker said: "this season, we through the Consumer Direct Offense new strategy for short-term opportunities. Looking only time left in the 2018 fiscal year, through our brand strength and explosive force and the innovative products in our industry the most personal experience, and digital link light Nike global growth under a view".

 


The company's so-called Consumer Direct strategy is driven by the brand's "Triple Double" strategy: connect with consumers for 2X Innovation, 2X Speed and 2X Direct.

In essence, the company's new line aims to make Nike more fully individualized for consumers, or to build local businesses globally.

 


Earlier in September, Nike said it would lay off about 745 people at its headquarters in Oregon as part of its restructuring.

 


The launch of Nike's accelerated product launch will shake the company's headquarters at 745


FBR&Co Susan Anderson, an analyst pointed out: "we like Nike channels of innovation and internationalization development and long-term profitability catalytic effect, but we still keep watching, and seek growth improve the camp, and the growth of the execution of profit margins and reducing inventory