Nike’s 2018 results fuelled by digital transformation

Worldwide
Published:  22 March, 2019

Revenues for the international sportwear Group increased +6% in 2018 to US$36.4 billion, up +4% on a currency-neutral basis.

Revenues for the Nike brand totalled US$34.5 billion in 2018, up +5%, with sales to wholesale customers up +2% and Nike Direct revenues growing +12% percent to US$10.4 billion, driven by a +25% increase in digital commerce sales, the addition of new stores and 4% growth in comparable store sales. According to the Group, the Nike brand revenue growth was driven by continued strength in international markets and Nike Direct with growth across footwear and apparel and key categories including Sportswear and Nike Basketball. Revenues for Converse were US$1.9 billion in the period, down -11%. Net income for the international sportswear Group’s decreased -54% in 2018 to US$1.9 billion, primarily attributed to the impact of the U.S. Tax Act, which is said to have offset strong revenue growth. Diluted earnings per share decreased -53% to US$1.17.

In the fourth quarter of 2018, revenues for the Nike totalled US$9.3 billion, up +9% on a currency-neutral basis, while revenues for Converse were US$512 million, down -14%. The Group’s net income in the quarter increased +13% to US$1.1 billion primarily attributed to strong global revenue growth, gross margin expansion and a lower tax rate, which were partially offset by higher selling and administrative expense, while diluted earnings per share increased +15% to US$0.69 reflecting a -2% decline in the weighted average diluted common shares outstanding.

“Our new innovation is winning with consumers, driving significant momentum in our international geographies and a return to growth in North America,” said Mark Parker, Chairman, President and CEO, Nike. “Fuelled by a complete digital transformation of our company end-to-end, this year set the foundation for Nike’s next wave of long-term, sustainable growth and profitability”, he added.

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