Nike Announces A Substantive Impact On Re Opening The US Store Epidemic Business

On May 15th, Nike (NYSE:NKE) finally began reopening its stores in the United States. However, the company said on Thursday that the new crown pneumonia pandemic is expected to have a significant impact on its business in North America, Europe and parts of Asia in the fourth quarter.

The sportswear and footwear manufacturer said that all of its own stores and more than 95% of the cooperative stores in Greater China and South Korea have resumed operations. Nike said that the traffic of these regional stores is growing, but still below the same period last year. The company said consumers' online "continued strong demand" offset some of its losses.

"As we continue to deepen our contacts with consumers, we are greatly encouraged by the recovery seen in Greater China and South Korea," Nike CEO John Donaho (John Donahoe) said in a statement. "With our strong digital foundation, brand dynamics and financial position, we believe that this will be a catalytic moment to enhance Nike's long-term future." After the announcement, Nike's share price rose less than 1% in after hours trading.

Nike said the company has started reopening in more than 15 countries including Germany, France, Holland, Brazil and the United States. In addition, Europe, the Middle East and Africa have about 40% of its own stores, 15% of its own stores in Asia Pacific and Latin America, and 5% of its own stores in North America are now reopened, with some stores shortening their business hours. In addition, wholesale partners, including Department Stores operators, began to reopen.

Nevertheless, Nike's business will be hit like its peers. The company said that due to the closure of the store, the delivery of the wholesale partners' products had stopped, resulting in a sharp decline in wholesale revenues and an increase in inventories.