What Is The Best Way To Make Nike Double Digit Growth For The 18 Quarter In A Row?

Sportswear group

The latest second quarter report is released. The data show that in the three months ended November 30th, its sales volume was 9 billion 380 million dollars, up 10% over the previous year, far exceeding the 7% expected by analysts. After the release of the financial report, Nike group's share price soared to nearly 8.3% to 73.1 dollars. According to the world clothing and shoe net, as of today's release, the opening price is still maintained at 73.3 dollars, and its market value is about 114 billion 930 million dollars.

Nike second quarter data

In addition to sales of $9 billion 380 million, it rose by 10% compared to the same period last year. Net profit in the second quarter also recorded an increase of 10% to $850 million, reaching double-digit growth and 43.8% gross margin.

In the first half of the fiscal year, Nike group's sales volume was 19 billion 320 million US dollars, up 10% over the same period last year. Net profit was 1 billion 940 million US dollars, up 13% from the same period last year, and the gross profit margin was 44%.

By brand:

core

Nike sales amounted to 8 billion 950 million yuan, up 10% over the same period last year.

Converse sales amounted to US $430 million, up 6% over the same period last year.

From the regional perspective:

The North American market is still the largest consumer market for Nike.

The Chinese market has achieved double-digit growth for 18 consecutive quarters, becoming the fastest growing and most profitable market.

In the Asia Pacific and Latin American regions, the figure reached $1 billion 298 million, while double-digit sales increased by 14%.

The EMEA region reached 2 billion 313 million, an increase of 15%, reaching double-digit growth.

Digital pformation and product optimization

Jay Sole, an analyst at UBS, believes that the Nike group's better quality than its competitors is the main reason for its continuous growth in performance, and consumers are willing to pay high prices for Nike sports shoes.

Mark Parker, chief executive of Nike group, revealed that the footwear products of Nike will continue to expand in the coming year in addition to running shoes and running shoes.

There will be more lifestyle sports shoes.

Nike also plans to expand its fastest growing clothing business, will also launch women's sportswear and men's yoga products, product optimization based on the expansion of multi industry chain, Nike is also one of the ways to enhance customer stickiness.

In addition, the Nike group's digital pformation began last year, and CEO Mark Parker emphasized that this season has become one of the main driving forces for brands in North America and the international market, of which North America's electricity business grew by more than 30%.

The growth of Greater China during the double eleven period is a record breaking year.

He also stressed in a statement: "we are very optimistic about the outlook for 2019. We have a complete innovation portfolio, the most personalized and responsive retail experience in the industry, and a supply chain that can deliver products on a large scale."

The rise of China's consumer market occupies an important position.

Nike group said that in the second quarter of the "double eleven" Shopping Festival in China, its core brand Nike became the top spot of outdoor sports brand sales list, and the turnover reached 100 million in the first minute, and the growth rate of sales reached 40%.

The second quarter's revenue in the Greater China region reached $1 billion 550 million, an increase of 26% over the previous year, up from 1 billion 380 million yuan in the first quarter, and the rate of increase is among the top four in the world's largest market. The analysis is mainly due to the global supply chain of Nike group.

At the same time, however, the business in Greater China accounted for only 17.3% of the Nike global business, but contributed 25% of the profit margin. Although it still can not compare with the previous 35% increase, it has undoubtedly become the fastest growing and the highest profit margin area in Nike. The rise of China's consumer market has played an important role in the Nike group's earnings report.

This year, Nike's actions in China continued. In September, it announced the launch of the first Nike member Mini program "Nike Nike Nike" with WeChat.

It is reported that after the registration of small programs into "NikePlus" members, priority can be given to new and exclusive customized services, and online shop can also enjoy the same.

In October, Nike opened the world's first digital flagship store "Nike House of Innovation 001" in China, with a floor area of 3822 square meters and a total of four storehouses. The shop is located in the shopping mall of Nanjing East Road, Shanghai city center.

The digital flagship store, which integrates digitization and offline services, is not only a product purchase, but also the latest technology innovation and customization of experiential Nike. It expands Nike's WeChat applet to offline and drives sports retail pformation.

2018 controversy and heat coexist

Nike is not so smooth this year. It has been boycotted by executives at the beginning of the year to discriminate against female employees, and it has been boycotted by Colin Kaepernick, the controversial player of 30th anniversary ad in September. Investors and analysts have not been optimistic about the overall development prospects of Nike. The price of Nike group has dropped more than 2% before the earnings announcement.

This means that for a brand, controversial advertising and activities are not necessarily a bad thing. It is reported that many consumers think this advertisement is beneficial to the improvement of social consciousness.

Controversy also means social warmth. John Kernan, managing director and senior research analyst at Cowen&Co., points out that Nike is not worried about advertising disputes about its "Just do it" 30th anniversary. Similar events help consolidate the emotional connection between brands and young consumers, and even enhance consumer loyalty.

In fact, a week later, advertising began to reverse the surge in share prices. According to the results, the advertisement had no negative impact on Nike, and even played a catalytic role.

In order to recover the performance, Nike made a series of adjustments and changes. In addition to the controversial advertising and online and offline channels combined to enlarge the brand advantage, multi-channel brand focus is also improving the brand breadth of Nike. The product is also constantly innovating product lines, creating personalized, fast response new retail, plus a global supply chain channel that makes the Chinese market grow substantially.

All of these will become one of the reasons why Nike group is very optimistic about 2019.

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