Nike Announces Annual Performance, Greater China'S 20 Quarter Two Digit Growth

In June 28th, sports brand Nike (NIKE) announced its year-round financial results for the fourth quarter of fiscal 2019 and the year ended May 31, 2019. In fiscal year 2019, revenue was $39 billion 117 million, an increase of 7% over the same period, while the fourth quarter revenue was $10 billion 184 million, up 4% over the same period last year. Gross profit margin was 44.7% in the year, net income increased to US $4 billion, net interest rate was 10.22%, and diluted earnings per share were US $2.49. Up to now, Nike's stock price has risen 12.9% this year.

According to the report, annual performance is mainly driven by NIKEDirect and wholesale growth, including Sportswear, Jordan and Running, as well as two digit growth in footwear and clothing. Among them, the income of NIKEDirect was $11 billion 800 million, the sales of e-commerce outlets increased by 35%, the same store sales increased by 6%, and the number of new stores increased. Sales of wholesale customers increased by 10%. Its brand CONVERSE's revenue was $1 billion 900 million, and its growth was mainly driven by the growth of Asia and digital, but this part was offset by the decline in the US and European markets.

As of May 31, 2019, Nike's stock was $5 billion 600 million, an increase of 7% over the same period, and the inventory level in all regions was relatively stable.

The biggest highlight of Nike's annual performance is in Greater China. Nike Greater China fiscal year 2019 revenue was $6 billion 208 million, an increase of 24% compared to the previous year, the pre tax profit of $2 billion 376 million, an increase of 31% over the previous year, and fourth quarter revenue of 1 billion 697 million US dollars, an increase of 22% over the same period, a double-digit growth for twenty consecutive quarters, and an increase of 25% in the pre tax profit period, reaching 674 million dollars.

In fiscal year 2018, the company's revenue in Greater China was US $5 billion 134 million. In the past year, Greater China revenue grew by more than US $1 billion. This is the first time Nike's Greater China revenue has broken through 6 billion US dollars. In 2018, China's sportswear market exceeded 40 billion dollars, and Nike's current market share was about 15%.

Mark Parker, chairman, President and CEO of Nike, said at a conference call that the 2019 fiscal year was a key year for Nike. The strategic transformation boosted Nike's strong growth worldwide. Thanks to its unique advantages in innovation and digitalization, Nike has further deepened its close ties with global consumers and promoted the implementation of ConsumerDirect Offense (close to consumer demand) strategy in the market.

In 2017, the company announced the strategy of the company, aiming at digitalization oriented, providing consumers with more efficient and more humane services on a large scale. In the same year, the company announced on investor day that its annual revenue is expected to reach US $50 billion by 2020, while the current US $39 billion 117 million annual revenue is not far from this goal.

Shen Wan Hongyuan securities analysis shows that the growth rate of China's sports apparel market has been accelerating since 2014, and its compound annual growth rate in recent ten years is nearly 10%, ahead of other countries and markets. It is estimated that in the next five years, the composite growth rate of China's sports apparel industry will still exceed 10%. Based on the fact that China's per capita sports costumes cost only 2/3 of the world's per capita value, there will still be room for growth in the future.

From the perspective of sports market structure, the concentration of the global sports apparel market is constantly improving, and the two giants of Nike and Adidas are in the leading position. In 2018, the market share of the global sports apparel reached 27%. At the same time, the quality of local sports apparel enterprises still had a larger growth space. Anta's multi brand strategy was more likely to break out in the future, and the momentum of Lining's recovery was stronger.