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Photograph by STR/AFP/Getty Images
Sports apparel giant
Nike
updated investors about its Chinese business and how the coronavirus outbreak was impacting operations after the close of trading Tuesday.
The impact looks like it is material. Nike (ticker: NKE) is temporarily closing about half its stores in China. The company wasn’t immediately available to a request asking for additional detail.
“First and foremost, our thoughts are with the people affected and we remain focused on the health and safety of our teammates and partners,” Nike CEO John Donahoe in the company’s news release said. “Despite this difficult situation, Nike’s long-term opportunity to continue to serve consumers in Greater China with inspiration and innovation remains exceedingly strong.”
Nike generated more than $6.2 billion, or about 16% of total sales, in China during the company’s fiscal 2019 year which ended in May. In addition to selling apparel in China, factories in the country manufactured about 23% of Nike branded footwear. The number for Nike branded apparel manufactured in China was about 27% of the corporate total for fiscal 2019.
The update Nike gave wasn’t long. (It’s less than 250 words.) But it is one of the most complete updates given by U.S. corporate management teams in recent days. Many companies mention coronavirus on earnings conference calls but, so far, management teams say that it is too early to estimate any financial impact the virus could have.
The news sent Nike stock down about 1% in after-hours trading, but the stock has bounced back and is up 0.1% at $1010.50 just before the open. Over the past 12 months, Nike shares are up about 23%, similar to gains in the
S&P 500
and
Dow Jones Industrial Average.
Write to Al Root at [email protected]
