Despite slowly reopening stores in the US, Nike revealed in a press release on Thursday that the coronavirus pandemic will continue to cause a serious "material impact" on its business in North America, Asia, and parts of Europe throughout the fiscal fourth quarter.
The athletic clothing and footwear company said all owned stores and over 95% of its partner stores in Greater China and South Korea are back up and running and that traffic is “progressing”.
Store traffic is still under levels seen last year and the company reported that “continued strong” online consumer demand is neutralising certain losses.
“We are encouraged by the recovery we are seeing in Greater China and South Korea as we continue to deepen our connection to consumers”, Nike Chief Executive John Donahoe said in an update on operations.
“With our strong digital foundation, brand momentum and financial position, we believe this will be a catalyzing moment that strengthens Nike’s long-term future”, he added.
Nike has seen stores reopen in over 15 countries including Brazil, France, Germany, the Netherlands, and the US. Department store operators and other wholesale partners are also starting to reopen but shipments have stalled which will lead to business taking a hit, the company explained.
The company revealed that 40% of owned stores in its Europe, Middle East, and Africa region have opened, as well as 15% in the Asia-Pacific and Latin American region, and just 5% in North America, some in a limited capacity.
Under Armour also reported on Monday that sales could fall as much as 60% during the upcoming quarter. According to the Nike competitor's Chief Executive Patrik Frisk, the second quarter could be even more challenging, as demand remains low and the company has to utilise promotions to sell products.