NIKE, Inc. (NYSE:NKE) today provided an overview of its progress on key
strategic initiatives to achieve sustainable, profitable long-term
growth. During an investor meeting at its world headquarters in
Beaverton, Ore., the Company stated it expects to deliver revenues of
$30 billion by fiscal year 2015, at the top end of its previously
announced fiscal year 2015 target range of $28-30 billion and shared a
new fiscal year 2017 revenue target of $36 billion. Additionally the
Company reaffirmed its long-term financial model of high single-digit
revenue growth, mid-teens earnings per share growth and expanding
returns on capital.
"NIKE, Inc. is designed to win. We’ve never been better positioned to
capitalize on the opportunities ahead of us,” said NIKE, Inc. President
and CEO Mark Parker. “We have a strong management team and we are
accelerating our innovation agenda to create products and services that
drive growth in the marketplace, deliver exciting retail experiences
globally and expand the capabilities of our powerful supply chain. We
will continue to serve the athlete, reward our shareholders, manage
risk, and lead our industry.”
NIKE Brand Overview
The NIKE Brand is expected to be the largest contributor of incremental
growth as the Company targets NIKE, Inc. fiscal year 2017 revenues of
$36 billion.
“The NIKE Brand is expected to deliver nearly $10 billion in incremental
revenue by Fiscal 2017 and our apparel, women’s, and e-commerce
businesses will support this growth,” said Trevor Edwards, President of
the NIKE Brand. “Over the last three years, the NIKE Brand has grown
close to 40 percent and we will continue to innovate and grow by
focusing on products and services that capture the imagination of our
consumer and help athletes perform at their highest potential.”
NIKE Brand – Geographic Opportunities
The Company also updated its projected long term growth plans in the
NIKE Brand geographies through fiscal 2017. In its more developed
geographies (North America, Western Europe and Japan), NIKE now expects
to generate average annual growth at a high single digit rate for the
four year period from fiscal 2014 through fiscal 2017, higher than the
previous target of mid-single digit growth. The Company expects North
America and Western Europe to reach over $14 billion and $6 billion,
respectively, by fiscal year 2017.
In its developing geographies (Greater China, Central & Eastern Europe
and Emerging Markets), the Company stated it expects to grow at a low
double-digit average annual growth rate for the four year period from
fiscal 2014 through fiscal year 2017. The Company’s expects its Emerging
Markets geography to grow at a mid-teens average annual growth rate and
for Greater China to return to growth, reaching an average low
double-digit rate of annual growth for fiscal year 2014 through fiscal
2017.
NIKE, Inc. – Direct to Consumer
The Company provided an overview of its plans to drive consistent growth
in its Direct to Consumer (DTC) operations. Due to strong results in its
inline and factory stores as well as on-line, the Company now
anticipates achieving its fiscal year 2015 NIKE Brand DTC revenue goal
of $5 billion almost a year earlier than planned. The Company also
announced plans for NIKE Brand DTC revenues to reach over $8 billion by
the end fiscal 2017. Over the next four years incremental growth in DTC
revenues is expected to be driven by e-commerce sales, which are
projected to grow to $2 billion, as well as by new door expansion and
continued same store sales gains in its factory and in-line stores.
Converse
The Company also discussed its plans for Converse, which is projected to
grow at a mid-teens average annual growth rate, to $3 billion in
revenues by the end of fiscal 2017. Over the next four years the Company
expects steady growth from the Chuck Taylor franchise, with more rapid
growth from Converse’s other brands, new apparel offerings, expansion of
its Direct to Consumer business and conversion of additional markets to
direct distribution.
NIKE, Inc. – Long-term Financial Objectives
Reviewing performance against the Company’s long-term financial model,
Chief Financial Officer Don Blair highlighted the Company’s delivery of
consistent results through dynamic market environments: “We are focused
on driving sustainable, profitable growth and increasing returns on
capital. The significant cash we expect to generate will enable us to
invest in compelling consumer experiences, industry-leading innovation
and premium destinations, in-store and on-line, to drive our growth,
while consistently increasing cash returns to our shareholders.”
The Company stated its primary financial objectives through 2017:
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High single digit average annual revenue growth
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Mid-teens Earnings Per Share growth (average annual rate)
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Maintaining a mid-twenties rate of Return on Invested Capital
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Days in Inventory improvement of 5 to 10 days
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Low double-digit Free Cash Flow growth (average annual rate)
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Annual capital expenditures in a range of 3 to 4% of annual revenues
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Increasing levels of annual cash returned to shareholders through
annual dividend increases and continued stock repurchases
Additional Presenters and Replay
Additional presenters from NIKE, Inc.’s senior management included:
Elliott Hill, President, Global Geographies and Sales; Jayme Martin,
Vice President & GM Global Categories; Jeanne Jackson, President,
Product and Merchandising; Christiana Shi, President, Direct to
Consumer; and Eric Sprunk, Chief Operating Officer.
Investors and media are invited to view the replay of the webcast and
slides from the event at http://investors.nikeinc.com.
The transcript and other event materials will also be available
approximately 24 hours after the event and accessible for approximately
a year after the event.
About NIKE, Inc.
NIKE, Inc., based near Beaverton, Oregon, is the world's leading
designer, marketer and distributor of authentic athletic footwear,
apparel, equipment and accessories for a wide variety of sports and
fitness activities. Wholly-owned NIKE, Inc. subsidiaries include
Converse Inc., which designs, markets and distributes athletic lifestyle
footwear, apparel and accessories and Hurley International LLC, which
designs, markets and distributes surf and youth lifestyle footwear,
apparel and accessories. For more information, NIKE’s earnings releases
and other financial information are available on the Internet at http://investors.nikeinc.com
and individuals can follow @Nike.
This press release contains forward-looking statements that involve
risks and uncertainties that could cause actual results to differ
materially. These risks and uncertainties are detailed from time to time
in reports filed by NIKE, Inc. with the Securities and Exchange
Commission, including Forms 8-K, 10-Q, and 10-K.
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