Nike targets revenue of $50 bn by 2020
15 October 2015
Nike, the world's largest sports apparel brand set a target yesterday at its investor conference to hit $50 billion in revenue by 2020. It was a goal CEO Mark Parker called "ambitious." In its most recent fiscal year ended 31 May, Nike had $30.6 billion in revenue, a 10-per cent increase over the previous year.
"The energy surrounding Nike and all our brands is really at an all-time high," Parker said at the company's Beaverton headquarters, to analysts keen to know the company's strategic plans for the next five years.
Nike stock was up 0.02 per cent to close at $125.84.
The company planned to hit its goal by focusing aggressively on product innovation and technology, developing deeper relationships with consumers through experiences and making heavy investments in women's business, a major growth category. It also expected a huge increase in e-commerce sales, from roughly $1 billion now to $7 billion by 2020, with plans to boost shopping capabilities on its apps and Nike.com.
"We will be at the consumer's fingertips every day," said Trevor Edwards, Nike brand president.
Nike is setting up a 125,000 square-foot facility on its campus just outside Portland, Oregon, focused on "advanced manufacturing and design technologies," including 3-D printing capabilities, which it had already been using to produce some shoes.
According to Parker, Nike had always been at the forefront of innovative design and had the third-largest portfolio of design patents in the US.
The sportswear maker's revenue was up 52.2 per cent, or $10.5 billion, in the past five years hitting $30.6 billion in the year ended May 2015.
According to Nike's projections, sales in the women's business would almost double, topping $11 billion in 2020 from $5.7 billion in 2015.
"Our women's business today is outpacing our men's business on dotcom. So it gives us a great indication that more women want access to our brand," Nike brand president Trevor Edwards told Reuters while at the company's investor meeting.
The company's e-commerce business, which brought in just over $1 billion per year, would be expected to grow to $7 billion by 2020.
Nike, co-founded by Phil Knight and Bill Bowerman in 1964, had overtaken No.1 rival Adidas, while keeping away rivals such as Under Armour Inc.
According to Thomson Reuters, Nike's revenue was expected to increase 39 per cent over the next four years, while Adidas's was expected to rise 33.3 per cent.
Last month shares of Nike Inc rose 9.3 per cent in early trading after it beat first-quarter earnings estimates, on the back of higher prices and a lower tax rate. (See: Nike shares up 9.3% as earnings beat estimates).