On Strong Results, Nike Vows To Make Digital 'Simple And Personal'

Nike Inc. says its commitment to “going deep” with consumers for each sport is paying off, with quarterly sales and earnings coming in above analysts’ expectations. And with e-commerce sales up 50%, it promises to intensify its digital efforts in the year ahead.

The Beaverton, Oregon-based company says revenues climbed 4% to $7.7 billion. (On a currency neutral basis, that gain was 12%.) Net income jumped 20% to $785 million. And perhaps most impressively, future orders — a key metric — shot up 15%, with demand especially strong in North America and China, despite some challenging economic factors.

“Our complete offense, which includes our brands, geographies and categories, makes us flexible and keeps us close to the consumer so we can see and act on new opportunities, in real-time,” says Mark Parker, president and CEO, in remarks prepared for the company’s conference call. “We see it in the markets we transform like China and Western Europe … and in the businesses we accelerate, like women’s and the Jordan brand.”



Revenues for the Nike brand gained 13% to $7.3 billion, while sales fell 5% at its Converse division to $398 million, as declines in Europe erased strong momentum in North America. Sales of its Jordan brands increased in the “strong double digits,” running also experienced double-digit games, and basketball grew by mid-single digits.

Earlier this year, the company revealed its goal of increasing e-commerce sales to $7 billion by 2020, which Parker reiterated on the call. “When we expand our footprint, it gives new consumers access, drives great energy for our business.

We have focused our investments in digital and mobile over the last several years and they’re paying off.” Sales of its Jordan brands increased in the “strong double digits,” running also experienced double-digit games and basketball grew by mid-single digits.

Promising to announce more about its digital plans this year, “we’re continuing our never-ending quest to make the digital experience simple and personal,” he says. “Simple, moving toward one access point for the best of Nike … and personal, more and more tailored to the individual.”

Deutsche Bank, which rates the company as a buy, says Nike has “consistently surpassed expectations this year.” And while it does expect that will be face “incremental promotional pressures during the November quarter, which should continue into the current, February 2016 quarter,” writes analyst Dave Weiner, “we believe that management largely accounted for these incremental promotions in its guidance.”

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