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Nike reports strong sales growth in Q4 and FY19

By Prachi Singh

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Business

Nike, Inc. has announced that fourth quarter revenue increased to 10.2 billion dollars, up 4 percent on a reported basis and 10 percent on a currency-neutral basis, while full year revenue rose to 39.1 billion dollars, up 7 percent on a reported basis and 11 percent on a currency-neutral basis, as strategic investments in innovation and digital drove global consumer demand led by Nike Direct in both periods. The company added that diluted earnings per share in the fourth quarter were 62 cents, while diluted earnings per share for the full year was 2.49 dollars.

“FY19 was a pivotal year for Nike as we continue to bring our Consumer Direct Offense to life throughout the marketplace,” said Mark Parker, Chairman, President and CEO, Nike, in a statement, adding, “Our distinctive innovation and digital advantage led to accelerated growth across our complete portfolio, while our brand fuelled deeper relationships with consumers around the globe.”

Review of Nike’s Q4 income statement

Fourth quarter revenues for the Nike brand were 9.7 billion dollars, up 10 percent on a currency-neutral basis, which the company said, were driven by growth across Nike Direct and wholesale, key categories including sportswear, Jordan and basketball, and continued growth across footwear and apparel.

Revenues for Converse were 491 million dollars, flat to prior year on a currency-neutral basis, mainly driven by double-digit growth in Asia and digital which was offset by declines in the US and Europe.

Gross margin increased 80 basis points to 45.5 percent. Net income was 989 million dollars and diluted earnings per share was 62 cents driven by strong revenue growth, gross margin expansion, and a lower average share count, which were slightly offset by higher selling and administrative expense and a higher tax rate.

Highlights of Nike’s FY19 performance

Nike said, full year revenues for the Nike brand were 37.2 billion dollars, up 11 percent on a currency-neutral basis driven by growth across Nike Direct and wholesale, key categories including sportswear, Jordan and running, and double-digit growth across footwear and apparel. Nike Direct revenues were 11.8 billion dollars, up 16 percent on a currency-neutral basis, driven by a 35 percent increase in digital commerce sales, 6 percent growth in comparable store sales as well as the addition of new stores. Sales to wholesale customers increased 10 percent.

Revenues for Converse were 1.9 billion dollars, up 3 percent on a currency-neutral basis, mainly driven by double-digit growth in Asia and digital which was partially offset by declines in the US and Europe.

Gross margin increased 90 basis points to 44.7 percent. The company added that net income increased to 4 billion dollars and diluted earnings per share was 2.49 dollars driven by strong revenue growth, gross margin expansion, a lower average share count and a lower tax rate, which was partially offset by higher selling and administrative expense.

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Converse
Nike