NIKE's E-Commerce Surpasses $1 Billion

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NIKE's E-Commerce Surpasses $1 Billion

By Jamie Grill-Goodman - 06/29/2015
NIKE, Inc.'s e-commerce business is growing, and the company attributes it to being one of the "world's most engaged brands online."
 
Nike.com delivered 51% revenue growth in Q4 with 55% growth for the full year, seeing increases in both traffic and conversion, fueled by NIKE's investments in critical infrastructure to improve the consumer experience on both desktop and mobile, according to information from the Q4 2015 Earnings Call.
 
"I’m proud to say our e-commerce business surpassed $1 billion in revenue this past year, a fantastic achievement from all of our teams," revealed Mark Parker, President and CEO, NIKE, in the Call.
 
NIKE's traffic on mobile has exceeded traffic on desktop, making it a very sharp point for consumer engagement going forward. Parker noted the company is just scratching the surface of its potential in this area.

"Global consumer spending through e-commerce exceeds $1 trillion, a significant portion of which is done on mobile devices, tremendous opportunity ahead for us in e-commerce," said Parker.

Earlier in the call, Parker noted that consumers are increasingly connected and utilizing premium personal digital services.

"Digital is an accelerator of growth that is shaping everything we do. We are building deep connections to consumers with digital services and communities to driving rapid expansion of our e-commerce business. This is all made possible, because NIKE is one of the world's most engaged brands online. It's where we connect with the consumer one-to-one and it's where we connect people to one another. And we're constantly looking for new always to seamlessly connect social platforms to commerce," said Parker.
 
The following are a few key takeaways from the call:
  • NIKE, Inc. revenues grew 10% to $30.6 billion, despite significant FX headwinds. On a currency neutral basis, NIKE, Inc. revenues grew 14%. Gross margin increased 120 basis points to 46%. Earnings per share rose 25% to $3.70 and we delivered ROIC of 28%.
  • Earlier this quarter NIKE Women’s launched the Instagram shop, a new tool that allows users to click a photo and be taken directly to nike.com product pages.
  • NIKE is one of the first partners to offer curated product collections through Twitter.
  • NIKE deepens its relationship with consumers through services like Nike+ run club and Nike+ Training Club that inspire and enable them to do more and to get better. The Nike+ Training club app continues to build a motivated community of devoted athletes and now features 135 workouts and is available in 17 languages.
  • Accessible through nike.com, the Nike+ Run Club training plans bring together Nike Expert running guidance to one place. In April, the company unveiled a Nike trainers’ hub that unites the global network of elite trainers to help every athlete reach their peak potential.
  • Operating overhead increased 13% for the quarter and 16% for the full year. This reflected growth in NIKE's higher gross margin, higher cost DTC business as well as investments in operational infrastructure and digital, including consumer engagement.