January 3, 2011, 2:53 PM

E-commerce sprints ahead at Nike

Online retail sales have grown for 15 consecutive quarters, CEO Mark Parker tells Wall Street.

Mark Brohan

Research Director

Lead Photo

As the CEO sees it, Nike Inc.’s e-commerce business is thriving.

Though Nike, No. 48 in the Internet Retailer Top 500 Guide, doesn’t break out web sales in its earnings reports, CEO Mark Parker recently told Wall Street analysts that Nike has now grown its e-commerce business for 15 consecutive quarters.

“Our Nike direct-to-consumer businesses grew double-digits, including strong comparable-store growth and the 15th consecutive quarter of double-digit sales growth online,” Parker said on Nike’s second quarter fiscal 2011 earnings call. “Our performance in the second quarter is not just about the last three months. It’s about the last three years and the steps we’ve taken to grow the market worldwide, creating strong momentum around the brand even in uncertain times.”

For the second quarter of fiscal 2011 ended Nov. 30, Nike reported:

  • Total sales increased 9.1% to $4.8 billion from $4.4 billion in the second quarter of fiscal 2010. Nike did not break out numbers for its direct-to-consumer business unit, which includes factory-owned stores, online and other direct market sales. For the first two quarters of fiscal 2011, total sales grew year over year 8.8% to $10.01 billion from $9.20 billion.
  • Net income increased 22% to $457.5 million from $375.0 million in the prior year. For the first two quarters, net income grew year over year 13.7% to $1.01 billion from $888 million.

Nike, which in 2009 rolled out an updated NikePlus.com, an online community for athletes with more than two million members, said e-commerce is growing because of ongoing web site improvements. “Cyber Monday was our biggest ever and we continue to build meaningful connections, which give our consumers a way to connect with their favorite sport in a way that only Nike can provide,” Parker said, referring to the Monday after Thanksgiving. “Look for us to continue to bring unique products and experiences to our consumers as we leverage the potential of NikeStore.com.”

Parker also said Nike anticipates strong growth online for the foreseeable future. “We’ve seen great momentum online over the last couples of years and I truly believe we are seeing just the tip of the iceberg of what we can achieve,” Parker told analysts.

 

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