Nike Expects To Reach $50 Billion By 2020

Photo Credit: Nike.com
Photo Credit: Nike.com

A few weeks ago, at Nike’s 2015 Investor Day, the company announced its expectation to deliver $50 billion in revenue by 2020.  Nike reached $30.6 billion by the end of FY2015 so they are projecting a 38% increase in revenue over the next five years.  Part of the strategy to achieve the growth includes: expanding the women’s business, growing e-commerce, moving Jordan beyond the basketball category, forging strategic partnerships and increasing global revenue.  The full transcript can be found here.

Nike:

NIKE is built for growth,” said Mark Parker, President and CEO of NIKE, Inc. “We see tremendous growth potential in our key categories and geographies, as we connect with athletes through personal service, inspirational experiences and innovative product. When we look across our entire business, there has never been more opportunity.”

“Today, we’re showing how Nike is built for growth – now and for years to come,” says Parker. “We lead because we serve the athlete and consumer completely – through breakthrough product and personal experiences, all around the world. As we look toward 2020, we are accelerating the pace of innovation across every area of our business to deliver the very best to athletes everywhere – when and where they want it.”

  1. Nike plans to nearly double its women’s business from $5.7 billion to $11 billion. They are primed to capitalize on the “athleisure” trend.   According to USA Today, these plans include rolling out a Flywire sports bra, opening more women only stores, dedicating store space for women’s products and expanding group training opportunities aimed at women.
  1. E-commerce is projected to increase from $1 billion to $7 billion. Over the past 18 months Nike has connected all of its US store, Nike Stores, and Factory Stores to mobile checkout and an in-store digital commerce platform.  This allows consumers to shop online and in-store at the same time, which gives them access to an endless supply of products, any way they want them.  The concept has been launched in the UK and they plan to roll it out worldwide.  Additionally, Nike will continue to lead with mobile and expand nike.com globally.  Canada, Switzerland and Norway are next on the list for nike.com.
  1. Jordan is expected to nearly double to $4.5 billion. According to Bloomberg Business, Nike’s Jordan brand will start making sneakers for women.  There will also be gear for weekend warriors, football fans and runners.  College football fans learned of Jordan’s plans for category expansion this summer when they announced the Michigan wolverines will be the first football team to wear the Jumpman logo.
  1. Nike will partner with DreamWorks and its newly formed technology company, NOVA, to build a 3D digital system that will transform the product creation process. This includes nearly instantaneous digital print applications, photo-real 3D visualizations and ultra-rapid prototyping.  Nike plans to develop a 125,000 square-foot Advanced Product Creation Center that will improve concept-to-creation.  Additionally, Nike will partner with Flex, a $26 billion world class manufacturer with global supply chain expertise.  The partnership will allow Nike to deliver footwear innovation to consumers more quickly, with more customization options.
  1. Global growth will be critical for reaching the lofting revenue goal. Nike is expecting its China revenue to more than double to $6.5 billion.  Despite some economic instability in China, Nike expects its business to grow.  Providing distribution where consumers live, shop and participate in sports as well as focusing on running, basketball, Jordan, sportswear and women’s categories seems to be the winning strategy.

The Rio Olympics in 2016 and Nike’s NBA deal for 2017 should have a significant impact on revenues as well.   It’s no surprise a company that outfits some of the world’s best athletes would aim for such an ambitious goal.  Nike has the visionary leadership, bleeding edge innovation and “it” products to pull it off.  If there is anyone who can “just do it,” it’s Nike.

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