Nike Inc. said annual revenues inched forward 1 percent to USD 51.4 billion, with growth in Greater China and Asia Pacific Latin America, partially offset by slowing North America and Europe sales.
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By region, Greater China sales grew 8 percent to USD 7.5 billion for the full year ending May 31, driven by a 14 percent surge in apparel sales in the region, and a 17 percent rise in equipment sales. Footwear, its largest category by sales volumes, were up 6 percent in the region.
Elsewhere, the U.S. sportswear firm’s Asia Pacific Latin America (APLA) region recorded annual sales of USD 6.7 billion, up 5 percent, thanks to double-digit gains in its equipment segment, and a 7 percent increase in footwear, partially offset by a 2 percent decrease in apparel sales in the region during the 12 months.
Globally, Nike brand revenues were USD 49.3 billion, up 1 percent, lead by Greater China and APLA, while Converse sales struggled during the year, down 14 percent to USD 2.1 billion, due to declines in North America and Western Europe.
By channel, Nike direct revenues were USD 21.5 billion, up 1 percent on a reported and currency-neutral basis, led by Nike-owned stores growth of 6 percent, partially offset by a decline in Nike brand digital of 3 percent. Wholesale revenues were USD 27.8 billion, up 1 percent on a reported basis.
Despite the slowing sales growth update, the Oregon-based company said annual net income was USD 5.7 billion, up 12 percent, and diluted earnings per share were USD 3.73.
“We are taking our near-term challenges head-on, while making continued progress in the areas that matter most to Nike’s future – serving the athlete through performance innovation, moving at the pace of the consumer and growing the complete marketplace,” said John Donahoe, president and CEO, Nike, Inc.
“I’m confident that our teams are lining up our competitive advantages to create greater impact for our business.”
In December last year, the company revealed plans for USD 2 billion in cumulative cost savings over the next three years. Areas of potential savings include simplifying product assortment, increasing automation and use of technology, and leveraging scale to drive greater efficiency.
At the time of the announcement, Nike said a majority of the savings will be invested to fuel future growth, accelerating innovation at speed and scale, and driving greater long-term profitability.
As part of this commitment, the company said is taking steps to streamline the organisation, which is expected to result in pre-tax restructuring charges of approximately USD 400 million to USD 450 million that will largely be recognised in the third quarter, primarily associated with employee severance costs.