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.
You can read Sara Germano’s more detailed reporting on Nike’s latest fiscal year at the Wall Street Journal. You can look over the entire report at Nike.com.
