Nike Inc. is making progress toward its goal of becoming a $7 billion e-commerce player by 2020, as the footwear giant reported a 46% year-over-year increase in online sales for its fiscal second quarter of 2017.
The gain for the quarter ended Nov. 30 and reported Tuesday follows a 49% increase in Nike’s first fiscal quarter. In 2015 Nike unveiled an ambitious plan to grow its e-commerce business to $7 billion by 2020. It has rolled out a number of initiatives in the past year to get there, including a much-touted mobile app, expanding online into new foreign markets and strategies aimed at connecting in-store and online shopping.
Nike, No. 47 in the Internet Retailer 2016 Top 500 Guide, does not break out e-commerce sales in dollars, but Internet Retailer estimates it sold roughly $1.51 billion online in its most recent fiscal year, up from $1.00 billion the year prior. For Nike to achieve its $7 billion e-commerce goal by 2020, it will have to grow at roughly 46.7% per year for the next four years. So far this year it’s on track, with a 49% increase in Q1 and a 46% jump in Q2.
In the most recent quarter, total sales grew roughly 6% for Nike compared with last year—its 28th consecutive quarter of growth, the company says.
Nike’s direct-to-consumer business, which includes Nike.com, sales on foreign online marketplaces, e-commerce sites in more than 40 countries and more than 1,000 Nike and Converse-owned stores worldwide, did well as a whole. Direct-to-consumer revenue increased 23% in fiscal Q2, driven by growth in many key areas, including double-digit traffic increases, higher conversion and larger order values across stores and the web, executives told analysts Tuesday on a conference call transcribed by SeekingAlpha.
Moreover, China is a major potential growth area for Nike’s e-commerce business and the company had a big quarter there online and offline.
“Greater China continued its strong results with its 10th consecutive quarter of double-digit growth, highlighted by another quarter of triple-digit growth in Nike.com,” CEO Trevor Edwards said on the call. “We had our biggest Singles’ Day ever, reaching nearly three times last year’s sales.”
China’s Nov. 11 e-commerce shopping holiday run by local e-commerce behemoth Alibaba Group Holding Ltd., called Singles’ Day, resulted in $17.8 billion in online sales in a 24-hour period. Nike was one of the best-selling U.S. brands that day, Alibaba says.
For the quarter ended Nov. 30, Nike reports:
- Revenue of $8.18 billion, a 6.4% increase compared with $7.69 billion in the same quarter of fiscal 2016.
- Net income of $842 million, up 7.3% from $785 million.
For the first half of fiscal 2017, Nike also reported:
- Total sales of $17.24 billion, a 7.1% increase compared with $16.10 billion in the first six months of fiscal 2016.
- Net income of $2.09 billion, up 6.6% from $1.96 billion.