Nike reported its 4Q earnings on Thursday afternoon (June 29, 2017), providing results that pleased Wall Street, with the stock up just over 10 percent in response. Total revenue for the quarter rose 5 percent, up $8.68 billion, and sales for all three brands, Nike, Jordan and Converse, were positive versus last year. It’s been a rough year fro Nike’s signature basketball platform and not surprisingly Nike said basketball sales were down.
On the call, Nike spoke about its focus on product innovation, pointing to its VaporMax shoe as evidence of the those efforts. “VaporMax has been very successful out of the gate with strong sell through across multiple releases. And looking ahead, will add even more breadth to the VaporMax family of products, scaling into millions of pairs through fiscal ‘18 to meet the growing demand,” said Nike CEO and president Mark Parker.
Consistently a high-flying stock on Wall Street, all throughout 2016 Nike took hits to demand with sales disrupted by the rise of Adidas and to some degree Puma (meanwhile Under Armour continued to sag). On June 15th, it announced plans to lay off two percent of its staff (approximately 1,200 workers) and then landed on the front page of the Wall Street Journal for its decision to sell directly to Amazon.
On the call, Parker addressed it decision to sell to Amazon, and explained, “We’re executing a new pilot with Amazon with a limited Nike product assortment. As we do with all of our partners, we’re looking for ways to improve the Nike consumer experience on Amazon by elevating the way the brand is presented and increasing the quality of product storytelling.”
On its earnings call, Nike sounded upbeat and confident and judging from some of its recent product and marketing initiatives, the company appears to be in a better place than this time last year. Nike conceded that the U.S. market was challenging because of a high level of promotions. What it didn’t point out (and probably never will) is that Adidas once barely existent in the United States is now a legitimate competitor.