Nike Inc. has just reported its fiscal 2018 fourth quarter earnings full year results and announced a four-year $15 billion share repurchase program of Nike’s Class B Common Stock.
In the last fiscal quarter, Nike lost 11 executives — some at the uppermost levels of the company — in a corporate culture scandal that, in the age of #MeToo, should have had a lasting impact. That has not been the case, and Wall Street is thrilled that Nike’s shares rose nearly 10% to $78.80 in after-hours trading on Thursday.
Highlights from Nike’s Q4 2018 report:
- 35% growth in Nike’s Greater China business, its best quarter in over six years.
- The company says that innovation — the Air VaporMax, React, Air Max 270, and ZoomX — drove more than 80% of Nike’s growth in fiscal year 2018.
- Jordan Brand nearly tripled the size of its women’s sneakers business in Q4.
- Nike Sportswear delivered a record quarter with more than $2.6 billion in revenue in Q4.
- Nike reported profit of $1.1 billion on sales of $9.8 billion (a 13% increase), spurred on by an effective tax rate that fell by more than half from 13.7% to 6.4%, according to the Wall Street Journal.
“Our new innovation is winning with consumers, driving significant momentum in our international geographies and a return to growth in North America,” said Mark Parker, Chairman, President and CEO of Nike, Inc., in a statement. “Fueled by a complete digital transformation of our company end-to-end, this year set the foundation for Nike’s next wave of long-term, sustainable growth and profitability.”
One of Nike’s main goals in 2018 was improving sales directly to consumers and it was successful; the company increased sales directly to consumer by 12% to $10.4 billion for the fiscal year ended in May. Its wholesale business grew only 4% over the same year.
Highlights from Nike’s Fiscal 2018 Income Statement:
- Revenues for Nike, Inc. increased 6% to $36.4 billion, up 4% on a currency-neutral basis.
- Revenues for the Nike Brand were $34.5 billion, up 5% on a currency-neutral basis.
- Revenues for Converse were $1.9 billion, down 11% due to declines in North America
- Gross margin dipped 80 basis points to 43.8%.
- Net income decreased 54% to $1.9 billion, which Nike says was the impact of the Trump Tax Act.