One year after its senior management told Wall Street that Nike was getting serious about e-commerce, the company is posting sharply higher web sales.
For the 2008 fiscal year, e-commerce sales rose by about 30%, Nike told analysts on the company’s recent year-end earnings call. Nike rarely breaks out e-commerce statistics. But the web now accounts for about 2% of the consumer brand manufacturer’s annual sales, Nike has told analysts. Based on that percentage, Nike generated web sales of about $424.3 million in fiscal 2008, compared with $326.5 million in fiscal 2007. The figure for 2008 is an Internet Retailer estimate. “Our investment in e-commerce delivered growth of over 30% for the year,” Nike chief financial officer Don Blair told analysts.
Overall, Nike, No. 47 in the Internet Retailer Top 500 Guide, posted net income of $1.9 billion on sales of $18.6 billion in fiscal 2008, compared with net income of $1.5 billion on revenue of $16.3 billion in the previous year.
The Internet and e-commerce accounted for an estimated 4% of Nike’s total sales growth in fiscal 2008. To grow its e-commerce business, Nike is committing more resources to its web operation. For example, in 2006 Nike redesigned Nike.com and added faster search and more rich media. The company also hired Chris Shimojima for the newly created position of vice president, global e-commerce. Shimojima was previously vice president and general manager of Sears Direct.
“The focus for us is in the U.S. market first and foremost but we see great potential around the world, certainly in Europe and in the Asia Pacific region as well,” Nike CEO Mark Parker told analysts on an earnings call in September. “We’re starting with the U.S. as the primary focus.”
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