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Nike Boasts ‘Digital Capabilities’ in Q1 Results

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By Published On: September 27, 20180 Comments

Nike is reportedly building momentum across its global business, with the brand’s Chairman, President and CEO, Mark Parker, saying its multi-platform consumer approach is paying off.

For Q1 in FY19, Nike increased its revenue by 10 percent, closing the quarter on August 31 with $9.9 billion. According to a press release issued on the matter, sales for both the Nike brand and NIKE Direct were driven by strong momentum in North America and double-digit growth in its international markets. This includes strong performance within Australia’s growing omnichannel scene.

“Our deep line of innovation is driving strong momentum and balanced growth across our entire business,” Parker said. “Our expanded digital capabilities are accelerating our complete portfolio and creating value across all dimensions as we connect with and serve consumers.”

Nike also experienced strong results on a currency-neutral basis, with revenue across the entire business increasing nine percent, and 10 percent when isolating the Nike brand from the business’s other income generating brands like Converse.

According to Andy Campion, the executive vice president and chief financial officer of Nike, the company is “delivering stronger global growth and profitability”, than was originally anticipated.

“While foreign exchange volatility has increased, our underlying currency-neutral momentum continues to build as we transform how Nike operates, drives growth and creates value for our shareholders,” Campion said.

Nike’s Digital-Focused Strategy

The first quarter saw Nike make significant investments in its Nike Live concept and digital-first strategy.

The new Nike by Melrose store is designed to give consumers a heightened customer experience, as it “leverages the power of digital” to remove some of the friction points that generally arise when retailers transition from traditional bricks-and-mortar retail or a pureplay environment, into an all-encompassing omnichannel offering.

Nike decided to open this store after experiencing positive growth in its in-app purchases, while also generating a substantial amount of mobile sales through its online NikePlus membership program.

This omnichannel offering that recognises the value of digital channels in a consumer-facing market is something Parker says will be introduced to some of Nike’s key demographics in the next quarter.

“What we’re learning in Melrose, we’re bringing to two new flagship stores in our two most important key cities, New York and Shangai,” he said in a conference call with analysts.

Nike also took steps to expand its digital offerings by establishing a presence on online marketplaces. When the company made the decision to sell its products on Amazon, industry experts reportedly warned of potential fallout. However, late last year Parker told analysts the partnership was “going well” and further expansion in the future could be expected.

This seems like it will be coming to play over Q2, with Nike announcing earlier this month that it will also start selling its apparel and footwear and Walmart-owned Jet.com, where it hopes to target the marketplace’s wealthier, millennial customer-base.

While Nike’s strong quarter has seen it assert itself against its competitors, including embattled brand, Under Armour, its Q2 results statement did lead to a two percent drop in shares. It’s believed this is a result of increased expenses over the quarter.

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