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NIKE (NKE) Ups Layoffs Target to 700, Restructuring on Track
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NIKE Inc. (NKE - Free Report) has revealed that it has increased the targeted layoff plans at its Oregon headquarters and surrounding areas from 500 to 700, per media reports. The company’s filing with the State indicated that the job cuts are likely to take place by Jan 8, 2021. The job cuts are part of its restructuring plan unveiled in summer 2020.
The job cuts will mainly occur at the company’s two Nike Child Development centers at its headquarters, which are expected to close permanently. This will impact nearly 192 employees at these facilities. Additionally, the layoffs will include members of NIKE’s corporate leadership team and corresponding executive assistants. These job cuts are likely to have started last month, per sources.
Per a July announcement, the company is expected to incur employee terminations costs of $200-$250 million related to these layoffs.
The retrenchment is not solely due to the effects of pandemic, but forms part of a strategic refocus on improving digital technology, and increasing the speed of delivery and fulfillment. In June, it unveiled a new company-wide digital transformation initiative called Consumer Direct Acceleration, as part of the Consumer Direct Offense strategy. The initiative is focused on making unified investment in technology across NIKE’s owned and strategic partner ecosystem to accelerate digital transformation. The company has also restructured to focus on three product categories -men’s, women’s and kids.
Amid the coronavirus crisis, digital portals have quickly gained prominence, becoming the primary channel to engage and serve customers. While many companies struggled to cope up with the same, NIKE benefited from this shift as it was well positioned to respond, thanks to the efficient digital ecosystem that comprises its online site and commercial and activity apps. Moreover, it believes that digital acceleration reflects a strategic shift toward a new future marketplace, rather than being a temporary solution to coronavirus-related challenges in physical markets.
Evidently, the company has been witnessing accelerated digital sales growth since the onset of the pandemic. For first-quarter fiscal 2021, it reported NIKE Direct sales growth 12% on a reported basis and 13% on a currency-neutral basis. Meanwhile, digital sales for the NIKE Brand were up 82% on a reported basis and 83% on a currency-neutral basis, aided by double-digit growth across North America, Greater China and APLA, along with triple-digit improvement in EMEA. Digital sales for the NIKE brand contributed about 30% to total revenues.
Even as stores reopen, the company continues to witness strong digital trends, which demonstrate the strength of its brands and investments made over the past several years to improve digital consumer experiences.
NIKE’s shares gained 1.8% to close at $124.59 on Nov 3. Overall, shares of this Zacks Rank #1 (Strong Buy) company have gained 23.4% in the past three months compared with the industry’s 20.1% rally.
Kontoor Brands, Inc. (KTB - Free Report) has an expected long-term earnings growth rate of 4% and a Zacks Rank #1.
Deckers Outdoor Corporation (DECK - Free Report) has an expected long-term earnings growth rate of 18.6%. It currently holds a Zacks Rank #2 (Buy).
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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NIKE (NKE) Ups Layoffs Target to 700, Restructuring on Track
NIKE Inc. (NKE - Free Report) has revealed that it has increased the targeted layoff plans at its Oregon headquarters and surrounding areas from 500 to 700, per media reports. The company’s filing with the State indicated that the job cuts are likely to take place by Jan 8, 2021. The job cuts are part of its restructuring plan unveiled in summer 2020.
The job cuts will mainly occur at the company’s two Nike Child Development centers at its headquarters, which are expected to close permanently. This will impact nearly 192 employees at these facilities. Additionally, the layoffs will include members of NIKE’s corporate leadership team and corresponding executive assistants. These job cuts are likely to have started last month, per sources.
Per a July announcement, the company is expected to incur employee terminations costs of $200-$250 million related to these layoffs.
The retrenchment is not solely due to the effects of pandemic, but forms part of a strategic refocus on improving digital technology, and increasing the speed of delivery and fulfillment. In June, it unveiled a new company-wide digital transformation initiative called Consumer Direct Acceleration, as part of the Consumer Direct Offense strategy. The initiative is focused on making unified investment in technology across NIKE’s owned and strategic partner ecosystem to accelerate digital transformation. The company has also restructured to focus on three product categories -men’s, women’s and kids.
Amid the coronavirus crisis, digital portals have quickly gained prominence, becoming the primary channel to engage and serve customers. While many companies struggled to cope up with the same, NIKE benefited from this shift as it was well positioned to respond, thanks to the efficient digital ecosystem that comprises its online site and commercial and activity apps. Moreover, it believes that digital acceleration reflects a strategic shift toward a new future marketplace, rather than being a temporary solution to coronavirus-related challenges in physical markets.
Evidently, the company has been witnessing accelerated digital sales growth since the onset of the pandemic. For first-quarter fiscal 2021, it reported NIKE Direct sales growth 12% on a reported basis and 13% on a currency-neutral basis. Meanwhile, digital sales for the NIKE Brand were up 82% on a reported basis and 83% on a currency-neutral basis, aided by double-digit growth across North America, Greater China and APLA, along with triple-digit improvement in EMEA. Digital sales for the NIKE brand contributed about 30% to total revenues.
Even as stores reopen, the company continues to witness strong digital trends, which demonstrate the strength of its brands and investments made over the past several years to improve digital consumer experiences.
NIKE’s shares gained 1.8% to close at $124.59 on Nov 3. Overall, shares of this Zacks Rank #1 (Strong Buy) company have gained 23.4% in the past three months compared with the industry’s 20.1% rally.
3 Related Stocks You Must Watch
Gildan Activewear, Inc. (GIL - Free Report) has an expected long-term earnings growth rate of 5.4%. It presently has a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kontoor Brands, Inc. (KTB - Free Report) has an expected long-term earnings growth rate of 4% and a Zacks Rank #1.
Deckers Outdoor Corporation (DECK - Free Report) has an expected long-term earnings growth rate of 18.6%. It currently holds a Zacks Rank #2 (Buy).
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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