Nike'S Tough Enemy Andouble Economics: Yen Depreciation Affects Performance

< p > Global sporting goods giant Nike released its fourth quarter earnings in June 28th. The report shows that Nike's global net profit increased by 22% over the same period, and the revenues in both Europe and America rose.

The US business week wrote that although Nike's performance in the fourth quarter exceeded the expectations of Wall Street analysts, Nike's inability to defeat Abe's economy was directly affected by its depreciation.

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< p > article also believes that dealing with the exchange rate change has become a very difficult and important topic for the world's major retail brands.

The article points out that after the Japanese Prime Minister Abe Shinzo came to power, the Japanese yen began to accelerate its decline in order to end Japan's domestic deflation and implement a series of economic stimulus policies and loose monetary policy, and the Japanese yen had fallen by about 10% against the US dollar.

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The depreciation of Japanese yen (P) has a direct impact on Nike's performance in Japan.

According to the financial report, Nike's revenue in the quarter ended May 31st was only 214 million US dollars, down 11% compared to the same period last year.

As Donald Blair, chief financial officer of Nike, said, "exchange rate changes have caused great resistance to Nike's performance."

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The poor performance of P has sounded the alarm for Nike. To deal with the impact of exchange rate changes has become a thorny problem that can not be ignored.

The article points out that in fact, Nike is not a novice in managing currency risk.

It buys the euro, sterling and yen futures contracts under the instructions of the securities and Exchange Commission in order to avoid currency risks.

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P, CEO of Nike, will use operational and financial leverage to deal with macroeconomic challenges.

However, as the article said, despite the many measures taken, Nike's performance in Japan still slipped.

Nike's leverage power is still inferior to that of Andouble's economics.

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< p > article thinks that for any retailing enterprise, easing the impact of exchange rate change is as important as keeping close supply chain, catching up with the trend of the world and grasping the latest technology.

As Japan's loose monetary policy is in full swing, the world's major retail brands are unable to get their bearings. Their performance in Japan has been affected by the depreciation of the Japanese yen.

Nike's positive measures to deal with monetary risks are not effective, which means that dealing with exchange rate shocks has become a real problem.

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