28 Jun Nike posts rosy earnings despite damning “toxic workplace” reports and staff exodus
After three consecutive quarters of revenue losses, Nike’s earnings are back up, beating analyst expectations. Its revenue grew by 13%, hitting $9.8 billion. This growth was driven by sales in Europe and the Middle East, although the very strongest performance was in China. There was also a return to growth in the United States, after months of decline.
Part of this success can be attributed to the launch of the Air VaporMax Flyknit and the Air Max 270, which the Telsey Advisory Group says were well received by retailers. Analysts at Susquehanna also said that these products were retailing well.
The only dark cloud over the earnings report came from Converse–the heritage sneaker brand acquired by Nike in 2003– which reported a 14% decline in sales to $512 million.
In an statement released by the company, CEO Mark Parker said Nike was embarking on a $15 billion share repurchase program that would take four years. This would begin in 2019, when its current $12 billion share repurchase was completed.
The largely positive news from this earnings call comes at a time of internal turbulence for the sportswear giant. Earlier this year, a scathing report in the New York Times revealed that Nike was bedeviled by a toxic workplace, where male executives discussed strip clubs and female genitalia in front of female colleagues, and one male boss called his subordinate a “stupid bitch” and kept his job. The report found that women who brought their complaints to HR were not taken seriously.
This has led to the departure of at least nine top executives at the company, including Vikrant Singh, a senior brand director for the Nike basketball brand in North America; Daniel Tawiah, VP of global brand digital-marketing innovation; and Antoine Andrews, VP of diversity and inclusion.
Significantly, Trevor Edwards, the president of the Nike brand and the leading candidate to succeed Mark Parker, resigned, as did his lieutenant, Jayme Martin.
Source: Fast Company