Nike Inc. is making major strides towards its goal of generating $7 billion a year in online sales.
The footwear manufacturer grew its online sales by 50% when factoring out the impact of currency fluctuations during the second quarter of Fiscal 2016. Nike, No. 62 in the Internet Retailer 2015 Top 500 Guide, did not report dollar figures, nor did it disclose results that account for fluctuations in exchange rates, which are likely to be less favorable given the strong U.S. dollar. The footwear giant has in the past stated a goal of reaching $7 billion in online sales by 2020.
During the quarter, Nike launched localized e-commerce sites in Canada, Switzerland and Norway, and says it plans to roll out additional sites for consumers in Mexico, Turkey and Chile in the next three months.
Nike experienced healthy growth in its direct-to-consumer business segment during the quarter thanks in part to e-commerce, executives told analysts on a conference call. Online sales were especially strong in China.
“We saw continued strong growth from our own DTC business [in China], up 51% in the quarter, fueled in part by our most successful ‘Singles’ Day’ event ever,” said Trevor Edwards, president of the Nike brand. “And Nike.com is showing extraordinary growth in China–one of the most mobile and connected countries on the planet.”
Singles’ Day refers to the annual online sales event every Nov. 11 that was started by Chinese online marketplace giant Alibaba Group Holding Ltd. six years ago. Online consumers spent 91.217 billion yuan ($14.08 billion) on Alibaba’s online marketplaces on this day, up 54% from Singles’ Day in 2014.
While Nike did not disclose details on its Singles’ Day activities beyond the comments on the earnings call, Alibaba reported last month that Nike was one of the top five best-selling sporting goods brands on its marketplaces during Singles’ Day. The five brands, including Germany-based Adidas, U.S. brand New Balance, and Chinese retailers Li-Ning and Toread, each sold between 200 million yuan and 1 billion yuan ($30 million-$150 million) worth of products in one day.
For the period ended Nov. 30, 2015, Nike reported:
- Total sales increased 4.2% to $7.69 billion from $7.38 billion in the second fiscal quarter of last year.
- Net income of $785 million, up 20% from $655 million.
For the first six months of the fiscal year, Nike also reported:
- Total sales of $16.10 billion, up 4.8% from $15.36 billion in the first two quarters of last year.
- Net income of $1.96 billion, up 21% from $1.62 billion.