Nike Aims To Speed Up The Supply Chain, Redesign Basketball Products And Reduce Prices.

The two quarter earnings report released on Tuesday, 20, showed a further slowdown in revenue growth, but it has already exceeded Wall Street's relatively relaxed forecast. However, the world's largest sporting goods manufacturer's data on futures orders no longer known from the beginning of this season are again a sign of concern.

In view of the fact that Nike group has revealed that the blue chip category that has been suppressed by its peers will recover in recent years, the main indexes such as value revenue and profit are all expected. The group's stock price has surged up to 5.6% to 54.7 dollars in after hours trading, but the final increase has narrowed to 1.9%.

As of Tuesday, the closing date on Tuesday, 20, has fallen by 17.1% in the year to date. It is likely to terminate the trend of annual share price rise in the past 7 years this year, while the recent breakthrough in 20000 points, the 14.6% highest increase in the Dow index, and 11.1% increase in the S & P 500 index.

In the two quarter of 2017 fiscal year ending November 30th, Nike group achieved a revenue of $8 billion 180 million, better than the $8 billion 90 million expected by the market, an increase of 6.4% over the same period last year, and a fixed exchange rate increase of 8%, compared with 10% in the first quarter.

Nike after excluding exchange rate effect

The largest and third largest markets in North America and greater China are clearly slowing down.

In the two quarter, North American income increased by only 3% to $3 billion 650 million, an increase of 6% in the first quarter and a slowdown in the Greater China region from 21% in the first quarter to 17%.

In addition, Japan has seen a negative growth of 2%, compared with 18% in the first quarter.

There were only second major markets in the period. Growth in Western Europe and emerging markets increased by 12% and 13% respectively.

Nike group is expected to continue to improve North America in the second half of the year, and gross margin and inventory levels will also improve.

However, the futures orders disclosed by the Group executives at the post earnings conference were depicting a relatively negative outlook. The Nike Nike brand North American orders, which were delivered before the end of April 2017, dropped 4% compared with the previous year before the exchange rate effect, a slight increase of 1.5% compared with the market expectations, and the overall orders were only 2%, far less than the 5.3% of the market forecast.

The group has not only eliminated the report of futures orders from the two quarter earnings report, but also strongly weakened the importance of the index, emphasizing that order performance does not reflect future growth accurately.

Gross profit margin fell 140 basis points to 44.2% in the two quarter compared with the same period last year. The higher average selling price was offset by the increase in product costs, the increase in discounted sales and unfavorable exchange rate fluctuations.

However, the drop in SG&A expenditure by 2% will help to increase net profit by 7.3% to 842 million US dollars annually. EPS increased from 0.45 US dollars to 0.50 US dollars in the same period last year, which is better than 0.43 dollars expected by the market. However, Thomson Reuters data show that Wall Street's profit forecast for Nike group has been decreasing in the last quarter, and the average EPS in September is expected to reach 0.52 US dollars.

Nike Group CEO Mark Parker lost their recent performance at the earnings performance conference.

Defender, such as group and Andrea, pointed out that there is misunderstanding in the industry that the growth of their way of life is sacrificed at the expense of functional business. In fact, these two businesses promote each other.

The group also admitted that its basketball product line was relatively low. Nike brand President Trevor Edwards said it had seen the momentum of basketball becoming stronger, and even said, "definitely, basketball is back."

In order to revive the basketball category to meet the strong challenge of the anmar curry basketball shoes series, Nike Nike brand redesigned the basketball product and lowered its pricing. In the 2016 fiscal year, the category (including Nike Nike brand and Jordan brand) accounted for more than 15% wholesale sales of Nike brand, and Trevor Edwards Edwards is expected to increase again in the second half of the year.

Nike group is also looking forward to strengthening its performance directly from consumer channels and online channels. The supply chain is also committed to speed up, hoping to accelerate the product to the "week" from "month" to "week".

The CONVERSE brand, which also belonged to the group, earned $416 million in the two quarter, up 4.5% from 398 million dollars a year ago.