Nike is making big changes a few years after it announced it would bet big on direct-to-consumer sales.
On Thursday, Nike announced it would cut up to $2 billion in costs over the next three years to
“fuel future growth, accelerate innovation and speed and scale and drive greater long-term profitability.” Among other areas, Nike will aim to simplify its product assortment, increase its use of automation and streamline the organization.
The news comes as Nike emerges from a challenging second fiscal quarter. While the brand’s overall revenue is up 1% year-over-year, Nike also slashed its sales outlook for the rest of the year, citing increased macro headwinds such as slowdowns in China and EMEA. At the same time, Nike’s average unit retail (AUR) grew across channels and its average order value (AOV) among members was up year-over-year, Nike chief financial officer Matt Friend said on an earnings call. “We believe we are turning the corner in driving more profitable and sustainable growth,” he added.
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