A man wearing a face mask walks past a Nike store in the Central Business District, Beijing, China on Feb. 17, 2020.
Andrea Verdelli | Getty Images
Nike shares fall on Friday after the company reported mixed third-quarter results late Thursday and confirmed it was laying off employees.
Shares fell nearly 4% in the afternoon. The stock is up more than 95% in the past year and has a market value of $ 217 billion.
Nike did not disclose the job cuts in its Thursday earnings report or call investors. The layoffs were first reported by The Oregonian, which covers the Portland-based sneaker company.
Nike said the cuts follow layoffs that began last summer. According to a filing with the Securities and Exchange Commission, Nike employed approximately 75,400 employees worldwide on May 31, 2020.
In a prepared statement, Nike was “focused on shifting resources and creating capacity to reinvest in our strongest growth markets.”
“We’re building a flatter, more agile business and transforming Nike faster to define the market of the future,” he said.
On Thursday, the sportswear retailer said its sales fell 10% year over year in North America during the fiscal third quarter ending Feb. 28, as port backlogs slowed shipments. This caused goods to arrive weeks late at its own stores and those of its wholesale partners, such as department stores and sporting goods, and increased the risk of them ending up on the clean-up rack.
Nike said sales at its stores in Europe, the Middle East and Africa fell during the quarter due to pandemic-related closures and restrictions.
“The good news here is that supply chain problems will disappear in the coming quarters, while Europe will reopen in time as the vaccine is further rolled out,” Jefferies analyst Randal Konik said in a research note. Konik values Nike a hold, with a target price of $ 140.
Nike pointed to bright spots such as the growth of its direct-to-consumer business, momentum in China and strong online sales. The company said it hit its first quarter with $ 1 billion in online sales in North America as consumers bought new sneakers and sportswear during their time at home. Sales in Greater China increased by 51%. And the company said it expects a similar resurgence in sales as other countries recover from the pandemic.