Affected by inventory, Nike Greater China's quarterly revenue fell 11% to $577 million.
Following the 12% decline in net profit in the first quarter of fiscal 2013, Nike’s newly announced second-quarter net income fell by 18% to 384 million U.S. dollars. Affected by inventory, Nike Greater China's quarterly revenue fell 11% to $577 million.
In the second quarter, Nike’s revenue increased by 7% to US$5.96 billion, slightly lower than the analyst’s forecast of US$6.11 billion; continuing operations profits increased by 9% year-on-year to US$521 million; diluted diluted earnings per share increased by 11% to US$1.14.
Although product pricing is increasing, due to the increase in labor costs and exchange rates, Nike's gross profit margin in the second quarter fell by 30 basis points to 42.5%. However, Nike expects gross margin to remain flat for the entire fiscal year.
It is noteworthy that, Nike's revenue in Greater China and Western Europe markets have declined. Among them, revenue in Greater China fell 11% to 577 million US dollars, while revenue growth in emerging markets outside China increased by 11% to 1.1 billion US dollars, Japan The market also grew by 11% to $219 million.
Some foreign media reported that Nike's problems in China are too many stocks, it is difficult to deal with fierce competition and local brand promotions, Nike to digest the excess clothing inventory in China, the pattern in China needs to be authorized to become wholesale sales.
In fact, in the fourth quarter of fiscal 2012, Nike’s sales revenue in the Chinese market has already shown a downward trend. The total sales revenue of Nike’s Greater China region, including footwear, clothing, and accessories, was US$667 million, compared to the third-deal. Season decreased by 3.89%. According to the Morgan Stanley report, in the fourth quarter of fiscal 2012, Nikkei’s global future order growth decreased from 18% to 12%, and China’s order growth was significantly reduced from 20% to 2%.
Nike's inventory in the same period began to grow. As of the end of May 2012, the amount of its inventory reached 3.35 billion US dollars, compared with 2.715 billion US dollars last year, an increase of 23.39%.
Nike CFO Don Blair said that Nike “took the initiative to cancel orders and reduce futures†in order to strictly manage the number of new products entering the (China) market.
In addition to inventory pressure, Nike has also had to face the performance impact of the economic slowdown, as well as the strong catch-up to Adidas, the impact of casual and fast fashion brands, as well as the pressure caused by the continuous promotion campaign of local brands.
It is not difficult to find that Nike, which previously had relatively little discounts, is currently participating in activities even with new products. However, Nike is clearly just a bit of a water-threatening attempt compared with the discounted price for local brands.
"Nike will not participate in the price war, but it is possible to introduce slightly cheaper shoes to meet market demand." A marketing source told the "First Financial Daily" that if you join a price war like a local brand, Nike will Not Nike, this can be imagined to the degree of damage to the brand itself.
The founder of Neev Capital, a consulting firm in London, believes that Nike's problems in China will not be resolved in the next 12 to 18 months, but it will not be worse than expected.
In the second quarter, Nike’s revenue increased by 7% to US$5.96 billion, slightly lower than the analyst’s forecast of US$6.11 billion; continuing operations profits increased by 9% year-on-year to US$521 million; diluted diluted earnings per share increased by 11% to US$1.14.
Although product pricing is increasing, due to the increase in labor costs and exchange rates, Nike's gross profit margin in the second quarter fell by 30 basis points to 42.5%. However, Nike expects gross margin to remain flat for the entire fiscal year.
It is noteworthy that, Nike's revenue in Greater China and Western Europe markets have declined. Among them, revenue in Greater China fell 11% to 577 million US dollars, while revenue growth in emerging markets outside China increased by 11% to 1.1 billion US dollars, Japan The market also grew by 11% to $219 million.
Some foreign media reported that Nike's problems in China are too many stocks, it is difficult to deal with fierce competition and local brand promotions, Nike to digest the excess clothing inventory in China, the pattern in China needs to be authorized to become wholesale sales.
In fact, in the fourth quarter of fiscal 2012, Nike’s sales revenue in the Chinese market has already shown a downward trend. The total sales revenue of Nike’s Greater China region, including footwear, clothing, and accessories, was US$667 million, compared to the third-deal. Season decreased by 3.89%. According to the Morgan Stanley report, in the fourth quarter of fiscal 2012, Nikkei’s global future order growth decreased from 18% to 12%, and China’s order growth was significantly reduced from 20% to 2%.
Nike's inventory in the same period began to grow. As of the end of May 2012, the amount of its inventory reached 3.35 billion US dollars, compared with 2.715 billion US dollars last year, an increase of 23.39%.
Nike CFO Don Blair said that Nike “took the initiative to cancel orders and reduce futures†in order to strictly manage the number of new products entering the (China) market.
In addition to inventory pressure, Nike has also had to face the performance impact of the economic slowdown, as well as the strong catch-up to Adidas, the impact of casual and fast fashion brands, as well as the pressure caused by the continuous promotion campaign of local brands.
It is not difficult to find that Nike, which previously had relatively little discounts, is currently participating in activities even with new products. However, Nike is clearly just a bit of a water-threatening attempt compared with the discounted price for local brands.
"Nike will not participate in the price war, but it is possible to introduce slightly cheaper shoes to meet market demand." A marketing source told the "First Financial Daily" that if you join a price war like a local brand, Nike will Not Nike, this can be imagined to the degree of damage to the brand itself.
The founder of Neev Capital, a consulting firm in London, believes that Nike's problems in China will not be resolved in the next 12 to 18 months, but it will not be worse than expected.
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