Nike storms ahead with double-digit growth in revenues and earnings
Oregon-based sportswear giant Nike, Inc. reported strong growth in both revenue and earnings in the second quarter, as the company reaps the benefits of the effective implementation of its “consumer direct offense”.
Nike’s revenues for the second quarter ended November 30, 2018, increased 10% (14% in constant currencies) to $9.4 billion, up from $8.6 billion in Q2 2018 – results which beat out analysts' estimates of $9.18 billion, according to IBES data from Refinitiv quoted by Reuters. The company’s namesake Nike brand also saw an increase of 14% in constant currencies, reporting revenues totaling $8.9 billion. This progress was led by the brand’s digital channels, as well as accelerated growth across all geographies and in Nike Direct. The Nike brand also posted quarterly revenue growth in almost all of its key categories, with sportswear leading the way, followed by footwear and apparel which both saw double-digit growth globally. Revenues at the Converse brand totaled $425 million, a 6% increase from the prior-year period, progress which was driven by growth in Asia and digital. Nike, Inc.’s strong revenue gains helped the company achieve net income of $847 million in the quarter, up 10% from $767 million a year ago. Diluted earnings per share increased 13% to $0.52. “Nike’s ambitious digital transformation is driving strong results and momentum in North America and in our international geographies,” said Nike chairman, president and CEO Mark Parker in a release. “We’re incredibly energized 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.” As the company pushes ahead with the development of its digital capabilities, it’s also worth noting that November saw the opening of the “Nike House of Innovation 000” on New York’s Fifth Avenue. The 68,000-square-foot flagship features some of the latest innovations in experiential and cross-platform retail, standing as a testament to the company’s dedication to finding new ways to catch and maintain consumers’ attention through both its digital and brick-and-mortar channels. “Amidst 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,” explained Andy Campion, Nike, Inc. executive vice president and CFO. “As we continue to invest in digital transformation, we are driving consumer-centric disruption in our industry and unlocking new opportunities for growth.” For the first half of fiscal 2019, Nike reported revenues of $19.3 billion, up from $17.6 billion in the equivalent six-month period in the previous year. Net income totaled $1.9 billion, up from $1.7 billion.
By Robin Driver
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