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Low Earnings, Better Revenue For Nike In Q4 2019

Sales of sneakers and regular sports gear helped Nike to improve its earnings above expectations in the fourth quarter of this fiscal year as revenues went up by 4 % and reached level of over $10 billion. The earnings details which were published this week missed expectations by a few pennies so the stock fell by more than 4 % before rebounding and then traded positively towards end of the day. The firm earned 62 cents per share on adjustment basis during last quarter which fell short of analysts’ expectations of 66 cents per share.

The revenues of Nike brand that does not include earnings from Converse brand merchandise increased by 10 % during the quarter to $9.7 billion and the sales of Converse were flat at $491 million. The sales of Nike in North America without inclusion of fluctuating currency rates went up by 8 % to $4.17 billion and sales in China moved up by 22 % to $1.70 billion. Nike has struggled to maintain its market share in United States due to increased competition from established home grown brands like Adidas and Lululemon.

It is also facing competition from small startup brands like Rhone and Outdoor Voices that are increasing market share in the world of athleisure clothes and footwear. In North America footwear sales were up by 9 % in the last quarter and apparel sales of Nike grew by 6 % while the sales of its sports equipment division went up by 7 %. Nike stated that its profits margins were negatively affected this quarter due to recent investments that were made to sell products directly to customers and reduce wholesalers in the supply chain. The firm has to now make arrangements to sell products directly to customers as its large retailers like Sports Authority and several small departmental stores are struggling to maintain their business. It is also setting up a supply chain for sales of new items like Vapormax running shoes.

Arnold Miller
Arnold Miller Author
EDITORIAL MANAGER At Global Market Journal

Arnold Miller is pro at explaining and presenting the business-related complex concept in a simple way. He has the ultimate skill of effectively writing down the news related to business mergers, political & financial affairs, acquisitions, and the latest business trends being followed by the globally established organizations. He also takes part in various surveys and key interviews with professionals, industry experts, and various organizations. He is also known for his immense knowledge of economics. Arnold had gained around 5 years of experience as a Business Analyst in a well-reputed production firm before choosing the field of Content Writing.

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