Nike shares fell 5.33% in electronic trading after the New York Stock Exchange closed. (Photo: 123RF)
New York – Nike Sportswear and Equipment Group (NKE) said on Thursday it has identified savings of up to $2 billion over three years through greater automation, assortment redesign and unspecified job cuts. .
On the occasion of publishing its results for the second quarter of its staggered financial year, the group said in a press release that the majority of these savings will be “invested in funding future growth, accelerating innovation at pace and scale and generating superior long-term profitability.”
The implementation of this cost reduction program is expected to result in pre-tax charges of approximately $400 million to $450 million, a large portion of which will be included in third quarter results.
It will mainly be severance pay, he indicated simply.
“We see an exceptional opportunity to generate long-term profitability growth,” Nike CEO John Donahoe was quoted as saying in a press release.
“Today, we are setting the company as a whole on a path of investing in our businesses with the greatest potential to increase our momentum towards innovation and accelerate our agility and responsiveness,” he said.
In the second quarter ended November 30, Nike reported revenue of US$13.39 billion (+1%) and net income of US$1.58 billion, a year-over-year increase of 19%.
Reported per share and excluding extraordinary items — the markets’ benchmark — earnings came in at $1.03, beating the consensus estimate of 84 cents.
However, the group reported a “softer environment” for its second-half revenue forecasts.
Nike shares fell 5.33% in electronic trading after the New York Stock Exchange closed.