Nike warns the coronavirus will have a ‘material impact’ on its China business
The coronavirus matter is hitting Nike’s (NKE) business in Greater China, according to a statement released by the global sportswear giant company.
“In the context of the evolving dynamics related to the coronavirus in China, Nike, Inc. is prioritizing the health and safety of our teammates and partners, in cooperation with local authorities,” the company said. “Similar to others in the marketplace, approximately half of Nike-owned stores have been temporarily closed, with corresponding dynamics across our partner stores. In addition, we are operating with reduced hours and experiencing lower than planned retail traffic in stores that do remain open. In the short term, we expect the situation to have a material impact on our operations in Greater China.”
Nike shares were down by more than 3% following the news.
Greater China is a key part of Nike’s global strategy, with international business in the region growing 23% in Q2.
Newly installed Nike CEO John Donahoe said in a statement that the topic of the coronavirus was not contemplated when the company put out its Q3 guidance. Despite the blow that the situation in China might cause, Donahoe is still confident in Nike’s long-term prospects in China.
“Despite this difficult situation, Nike’s long-term opportunity to continue to serve consumers in Greater China with inspiration and innovation remains exceedingly strong,” he said. “At the same time, we continue to have extraordinary brand and business momentum in all other geographies.”
Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.
Read more:
'Skecherizing': Nike sues Skechers for allegedly 'free-riding' on its patented sneaker designs
96% of teachers personally pay for students' supplies: Survey
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.
