Nike on Thursday reported Q1 revenues of $8B, a 15% increase “over the same period last year,” according to Allan Brettman of the Portland OREGONIAN. Profits in Q1 rose 23% to $962M from $779M during the same period last year. Revenues for Nike’s Converse brand were up 16% to $575M, while revenues for the Nike brand itself -- “the bulk of overall revenues” -- were up 15% to $7.4B. Operating overhead expense increased 19% to $1.6B “on higher costs from expanding the company’s direct-to-consumer business (web, Nike-only retail) and investments in operational infrastructure” (OREGONIAN, 9/25). In London, Elizabeth Paton wrote although revenue in Nike’s Greater China unit rose 18% to $679M, the company “highlighted Russia and Israel, higher inventory levels in Mexico and the weakening Brazilian economy as causes of concern.” The FIFA World Cup in Brazil this past summer drove a 23% “increase in marketing expenses” to $897M (FINANCIAL TIMES, 9/26).
STYLE GUIDE: In N.Y., Germano & Stynes reported Nike CEO Mark Parker began his quarterly results conference call with remarks “highlighting the importance of the apparel industry’s booming sales of athletically styled gear that has infiltrated casual wear … and even some workplace attire, a trend he said could play to Nike’s strengths.” Nike “still derives the majority of its income from North America and footwear,” but it “posted strong sales growth in Europe … and executives were optimistic about further growth there.” Sales in Western Europe in Q1 “had the highest rate of growth for any region,” up 32% compared to the same period last year, “driven in part by growth in the running and women’s businesses.” Nike future orders, “an indicator of upcoming growth, rose 11% in the latest quarter.” The future orders “are for Nike-branded footwear and apparel delivery between September and January” (
WALL STREET JOURNAL, 9/25).
CUSTOM FIT
: MARKETING WEEK’s Sebastian Joseph wrote Nike has “underlined plans to plough millions into expanding its ecommerce channel after seeing ‘bullish’ investments” in Q1 spark a 70% uptick in online revenue. Nike credited the spike in Q1 to “sales from its NikeID customisation service, women’s merchandise and running apparel.” The company “gave special credit to its Training Club app for women, which has been downloaded 17 million times, for driving demand for its apparel.” Teams “across the business are ‘squarely focused’ on using the data gleaned from the services to inform future investments, which the company added will cover updates to the Nike Training Club concept, online stores and digital style guides.” The e-commerce performance “helped Nike’s total revenue sprint past analysts’ expectations” for Q1 (
MARKETING WEEK, 9/26).
