At its Investor Day held at Tiger Woods Center at its Portland headquarters, Nike officials said they expected earnings per share to grow in the mid-teens on high-single-digit revenue growth over the next five years.
The company had already set a target of $50 billion in annual sales by 2020. Revenues were $34.4 million in its fiscal year ended May 31, 2017.
At the event, Mark Parker, Nike’s CEO, he expects digital revenues to expand from 15 of revenues to 30 percent over five years. About half of its sales growth over that period will come from new categories and about 75 percent growth from outside the U.S. China was often mentioned as a key growth opportunity.
The company’s primary consumer base is 50 million in the U.S., but “if growth trends continue in China, the primary consumer base will be 10 times that,” Parker said.
Officials didn’t mention the recent slowdown in Nike’s growth, driven by North America. Most of the discussion elaborated on the company’s “Consumer Direct Offense” and “Triple-Double Strategy” already announced earlier this year to revitalize growth in part by forming deeper connections with consumers. The moves included the layoff earlier this summer of 2 percent of its workforce, or about 1,400 employees.
Parker said Nike plans to bring out “the most impactful portfolio of innovation in the company’s history” to stoke demand while also relating the many steps Nike is taking to adjust and capitalize on the retail disruption caused by digital technology and changing consumer preferences.
“We are moving away from undifferentiated retail and moving into environments with distinct retail experiences,” Parker said.
Nike’s brand president, Trevor Edwards, likewise stressed that the brand would be moving away from “undifferentiated” retail channels in coming years. “Mediocre retail won’t survive,” Edwards said.
Photo courtesy Nike
