Digital transformation drives Nike’s growth

Worldwide
Published:  07 January, 2019

The global sportwear manufacturer reported double-digit revenue growth for its second quarter ending November 30, 2018.

Nike Inc’s revenues increased +10% to US$9.4 billion in the second quarter of its fiscal 2019, up +14% on a currency- neutral basis. According to the manufacturer, revenues for the Nike brand were US$8.9 billion, up +14% on a currency-neutral basis, driven by accelerated growth across all geographies and in Nike Direct, led by digital. Revenue is reported to have grown in nearly every key category led by sportswear, with well-balanced double-digit growth across footwear and clothing globally.

Gross margin increased 80 basis points in the quarter to 43.8%, primarily driven by higher average selling prices and margin expansion in Nike Direct, partially offset by higher product costs. Net income increased +10% to US$847 million driven primarily by strong revenue growth and gross margin expansion.

“Nike’s ambitious digital transformation is driving strong results and momentum in North America and in our international geographies,” said Mark Parker, Chairman, President and CEO, Nike. “We’re incredibly energised about 2019 – with a full innovation pipeline; the most personal, responsive retail experiences in the industry, and a supply chain that’s delivering speed at scale.”

In the footwear category for the three months ending November 30, the Group’s revenue increased +8% in North America, +10% in the EMEA region, +29% in Greater China, and +1% in Asia Pacific and Latin America.

“Amid an increasingly dynamic macro environment, what is certain is that Nike’s execution of the Consumer Direct Offense is driving consistently strong growth across our diverse, global portfolio,” said Andy Campion, Executive Vice President and Chief Financial Officer, Nike. “As we continue to invest in digital transformation, we are driving consumer-centric disruption in our industry and unlocking new opportunities for growth.”