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Nike (NKE) stock dropped 3.94% to trade at around $97.40. The drop is being attributed to the unexpectedly poor results of the 2020 fourth quarter and full year that ended May 31, 2020.
American multinational corporation that specializes in footwear and other products, Nike Inc (NYSE: NKE), yesterday reported its fiscal 2020 fourth quarter and full-year results that ended on May 31, 2020. Due to the unexpected quarterly net loss, its NKE stock has declined in value in the after-hours. The shares closed yesterday with a 1.32% profit at $101.40, however, at the time of reporting they are down to $97.40, with the downtrend expected to continue in the pre-market and later in the day.
Checking its metric performance, in the past year, they have added 20.79%, however, they have remained stagnant YTD with a rise of 0.09%. NKE stock has added 21.83% in the last three months, and around 6% in the past five days. It is an impressive record putting in perspective most of its stores have been closed for nearly 8 weeks during the coronavirus pandemic onset. The decline in its sale is also attributed to the fact that most people are indoors and minimizing their expenses to survive comfortably through the pandemic when most jobs are at risk.
Nike Financial Report
According to the report, the company showed a $6.3 billion revenue in the fourth quarter, which was a drop from the prior year as most stores were closed due to COVID-19 disruption. The decline represented a whopping 38% drop on a currency-neutral basis. Its gross margin decreased by 820 basis points despite the increased wholesale discount at that period. In addition, the company reported a net loss of $790 million besides the diluted net loss per share of $0.51. However, the company reported a 75% increase in digital sales in the fourth quarter. It is a strategic move to counter the COVID-19 supply chain disruption that is yet to be fully resolved.
John Donahoe, President and Chief Executive Officer of Nike, said:
“In a highly dynamic environment, the NIKE brand continues to resonate strongly with consumers all over the world as our digital business accelerates in every market.”
“We are uniquely positioned to grow, and now is the time to build on NIKE’s strength and capabilities. We are continuing to invest in our biggest opportunities, including a more connected digital marketplace, to extend our leadership and fuel long term growth,” continued he.
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