The days of 40% and 50% year-over-year growth rates for Nike Inc.’s e-commerce business may be coming to an end.
The sneaker maker on Tuesday reported an 18% jump in digital sales in its fiscal third quarter of 2017. An 18% increase could be considered impressive for many online retailers, especially one as big as Nike, which brought in an estimated $1.51 billion in web sales last year. But it’s far lower than increases Nike posted in the past several quarters. It reported, for example, a 46% jump in e-commerce sales in its second quarter and a 49% jump in Q1, while in its last fiscal year online sales increased 51% compared with the previous year.
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 or two to get there, including a much-touted mobile app, advances to its Nike Plus loyalty program, expanding online into new foreign markets and strategies aimed at connecting in-store and online shopping.
For Nike, No. 47 in the Internet Retailer 2016 Top 500 Guide, 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.
Still, Nike executives say they are focused on appealing to the changing behavior of consumers, which is increasingly moving toward online shopping. “The consumer has decided digital isn’t just a part of the shopping experience,” CEO Mike Parker told analysts on a conference call Tuesday, according to a SeekingAlpha transcript. “Digital is the foundation of it.”
And online shoppers are shifting more toward shopping on their mobile devices, as a larger share of Nike’s growth in its digital business is coming from its mobile apps, Parker said on the call.
For the fiscal third quarter of 2017 ended Feb. 28, Nike reported:
- Total sales of $8.43 billion, a 5.0% increase compared with $8.03 billion in fiscal Q3 2016.
- Net income of $1.14 billion, up 20.0% from $950 million.
For the first nine months of fiscal 2017, Nike also reported:
- Total sales of $25.67 billion, up 6.4% from $24.13 billion in the year-ago period.
- Net income of $3.23 billion, an 11.0% increase from $2.91 billion.