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Nike financial performance in 2019 versus previous year

Nike (NASDAQ: NKE) is a well known sports shoe and apparel brand based in the United States. The company has its headquarters in Oregon, United States. It sells its products worldwide through both online and offline channels. Apart from the company owned retail stores, Nike also sells its products through independent distributors as well as licensees and sales repersentatives in almost all the countries around the world. United States is the largest market for Nike products. However, its share of revenue from the international markets has continued to grow over the last few years. The company has 384 brand retail stores operational in United States as of 2019 apart from 768 operational internationally. 

 20192018
Revenue$39,117$36,397
Net Income$4,029$1,933
Gross Profit$17,474$15,956
Total Assets$23,717$22,536
Cost of sales$21,643$20,441
Marketing expenses$3,753$3,577
Selling and administrative expenses$12,702$11,511 


Nike Distribution Centers in the United States:

The company has established six main distribution centers in the United States. Four of these distriution centers are located in Memphis, Tennessee. Nike owns two of these distribution centers and the rest two are leased properties. One more distribution center of Nike is located in Indianapolis, Indiana and one another in Dayton, Tennessee. Apart from the six main distribution centers, Nike also ships apparel and equipment form one another distribution center that is located at Foothill Ranch, California. This one is a leased facility and there are several more smaller distribution centers of Nike, all of which are leased and operated by third parties and located throughout the US in the various corners of the country.

Nike Brand Financial Performance in fiscal 2019 versus 2018

Apart from Nike brand products, the company also sells Hurley, Jordan and Converse products. (However, here we are discussing Nike’s sales and revenue from Nike brand products only) Nike’s net revenue grew by 11% on a  currency neutral basis in 2019 compared ot the previous year. It experienced revenue growth across all the geographic markets. Nike brand revenue from footwear and apparel grew 12% and 11% respectively in 2019. Revenue from Nike brand equipment on the other hand grew by 4%. Nike brand revenue grew aross all footwear categories. While the sportswear category saw the highest growth in revenue of all the footwear categories, the Jordan Brand and running categories also experienced growth though less than the sportswear category. While the unit sales of footwear grew by 8%, higher average selling price per pair drove a growth of around 4% in Nike’s revenue from footwear. Footwear accounted for around 65% of the company’s net revenue in 2019.

Nike revenue from Nike brand apparel grew 8% and 11% on a  currency neutral basis. The company experienced revenue growth across all the NIke brand apparel categories. Nike experienced a 6% growth in the sales of Nike brand apparel. Due to higher average selling price per unit, the revenue of the brand from apparel sales grew by around 5%. 

Nike revenue from Direct sales grew to 32% of the total sales of the brand compared to 30% during the previous year.  Ecommerce sales in 2019 reached $3.8 billion compared to $2.8 billion in 2018. Several factors drove the growth in revenue from Nike Direct which grew 16% on a currency neutral basis. Ecommerce sales of NIke grew 35% driving much of the growth in revenue from Nike Direct. Apart from that growth in comparable store sales as well as growth in the number of stores also drove revenue growth across Nike Direct. 

Nike’s revenue from men’s and women’s products grew 10% and 11% respectively on a currency neutral basis in 2019 compared to the previous year. Nike exprienced grwth across nearly all product categories for men and women and the highest across the sportswear category. Several factors drove Nike’s revenue growth across women’s product categories including Nike’s focus on creating more compellign designs, creating marketing camapigns focused on the female audiences worldwide as well as a shift towards a digital distribution strategy led by digital channels. Nike also exprienced growth across its Kids product categories except football products for kids. Wholesale revenue was 68% of Nike’s consolidated net revenue whereas revenue from Nike Direct was 32% on a currency neutral basis.

The geographic region accounting for the highest part of the company’s net revenue is North America. In 2019, it accounted for 43% of the company’s revenue, followed by Europe, Middle East and Africa at 26% as well as Asia Pacific and Latin America at 14%.  Greater China accounted for 17% of the net revenue of the brand in 2019. 

North America revenue of Nike grew 7% in 2019 compared to the previous year. 2019 revenue of Nike from North American region was $15.9 billion compared to $14.9 billion in 2018.  Revenue from Europe, Middle East and Africa grew to $9.8 billion in 2019 compared to $9.2 billion in 2018. Revenue of Nike from Greater China reached $6.2 billion in 2019 from $5.1 billion in 2018.

Top Walmart competitors in the US

Top competitors of Walmart in the US and their 2019 revenues.

Retailer Brand2019 Revenue (billions)
Walmart$524.00
Amazon$280.50
Costco$149.40
Walgreens$136.90
Kroger$122.30
Home Depot$110.23
Target$77.10
Lowe’s$72.10
Best Buy$42.90

There are a large number of players in the US retail industry including the physical retail leader Walmart and the ecommerce leader Amazon. The retail industry has seen a lot of growth in the recent years driven mainly by growth of ecommerce and higher spending due to increased economic activity and higher employment. In fiscal 2020, Walmart enjoyed heavy growth in its ecomemrce sales and revenue. From $25.1 billion in fiscal 2019, the ecommerce revenue of the company in 2020 grew to $35.9 billion.

There are a large number of competitors of Walmart in the US and the list includes both big and small players. Here are the most significant competitors of Walmart in the US.

The Kroger Company:

The Kroger company is headquartered at Cincinnati, Ohio, United States. It is among the largest food retailers in the US. Kroger’s physical retail store network is spread through 35 US states and the District of Columbia. It has 2,757 supermarkets and multi department stores operational in the US supported by 45 distribution centers. Nearly half a million associates work at the Kroger company. The company also runs 1,567 supermarket fuel centers and 35 food production plants as well as 256 jewellery stores. The company had consolidated net worth $122.3 billion in 2019. It experienced 2% same store sales growth in fiscal 2019. Kroger like Walmart has been investing in e-commerce for faster growth and during the last quarter of 2019, its ecommerce sales grew by 19%.

Costco:

Costco is also one of the leading US based retail brands. It operates membership based warehouses in the US and some more international markets. Its operating model is very different from Walmart or the other retailers. Like Walmart, Costco has also been investing in technology for faster growth in e-commerce sales. Costco enjoys very strong reputation in the US retail industry mainly because of its customer focus and an organizational culture that is centered upon diversity, inclusion and satisfaction of customers, employees and other stakeholders.

Costco operated 785 warehouses in 2019 of which 546 were in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 29 in the United Kingdom, 26 in Japan, 16 in Korea, 13 in Taiwan, 11 in Australia, two in Spain, one in Iceland, one in France, and one in China. 

 Costco also operates a private label brand called Kirkland Signature (a direct competitor of Sam’s Club).  In 2019, Costco’s net sales reached $149.4 billion (6% growth compared to the last year). 

Home Depot:

Home Depot is the largest home improvement brand in the world. Its headquarters are located at Atlanta, Georgia in the United States. The company offers a very large range of home improvement products and apart from that it offers building material, lawn and garden products and home decor products as well as home improvement services. As of fiscal 2019, Home Depot’s number of operational stores was 2,291. The consolidated net sales of Home Depot reached $110.23 billion in 2019 compared to $108.2 billion in 2018 (2% yoy growth). 

Walgreens Boots Alliance:

Walgreens boots Alliance is another US based retailer that sells health and wellness products apart from beauty and lifestyle products. Walgreens and its subsidiaries are present across 25 countries. Its phsyical stores (including the companies in which it has an equity investment) are located across 11 countries. A total of 18,750 such stores were operational as of 2019. Walgreens also operates one of the largest global pharmaceutical wholesale and distribution networks which has more than 4001 distribution centers delivering to more than 240,000 pharmacies, doctors, health centers and hospitals each year in more than 201 countries. In fiscal 2019, the consolidated net sales of Walgreens reached $136.9 billion.

Target:

Target Corporation is also mong the biggest players in the US retail industry. Its headquarters are located at Minneapolis in Minnesota, United States. Target was founded in 1902 as Dayton DryGoods Company. However, the first Target store opened in Minnesota in 1962. Target stores are operational across all the 50 states of the US. Target is a  general merchandise retailer and sells a large range of products.  Its net revenue in fiscal 2019 reached $77.1 billion. The number of Target stores operational in 2019 was 1871 and the number of distribution centers that support its retail network was 41. Target also owns 42 unique brands not available at other retailers.

Amazon:

Amazon is the world’s largest ecommerce brand with a global presence. It was founded by Jeff Bezos and has its headquarters in Seattle, Washington, United States. Amazon’s global sales and distribution network caters to a large audience globally. Apart from that its ecommerce websites are supported by a global network of global warehouses for supply and distribution. 

The consolidated net sales of Amazon have more than doubled in the last four years mainly because of growth in demand, technological innovation and customer experience. Amazon is also a leading cloud technology brand, but ecommerce accounts for the largest part of its revenue. Its business operations are divided into three segments including North America, International and Amazon Web Services. In 2019, the consolidated net sales of Amazon reached $280.5 billion, rising from $232.9 billion in 2018.

Lowe’s:

Lowe’s is the second largest home improvement brand in the world. It was ranked at the 40th spot on the fortune 500 list in 2018. The company serves more than 18 million customers each week in the US, Canada and Mexico.  Its largest market is the United States. The US market accounted for more than 90% of its revenue in 2018. Net sales of the company reached $72.1 billion in 2019.  The company employs around 310,000 people. Lowe’s sells merchandise in 13 categories ranging from appliances and tools to paint, lumber and nursery products. The company also sells around 400,000 products online. 

 Best Buy:

Best Buy is also one of the biggest retail brands in the United States. It sells merchandise in the following main categories: computing and mobile phones, consumer electronics, appliances, entertainment, services and other.

Apart from the US, Best Buy has operations in Canada and Mexico. As of the end of fiscal 2019, Best Buy had 1187 large format and 51 small format stores in its domestic and international markets. There were a total 1,026 Best Buy stores operational in the US in 2019 and 212 in its international markets. The consolidated net revenue of the company was $42.9 billion in 2019 compared to $42.15 billion in 2018.

Restaurant Brands International Number of Employees

Number of employees at Restaurant Brands International 2014-2018.

YearEmployees
20186,000
20176,200
20164,300
20154,300
20144,600

Restaurant Brands International (RBI) owns and operates Tim Hortons, Burger King and Popeyes.  Its main markets include US and Canada. 

Total number of employees working for Restaurants Brand International in 2018 was 6,000 compared to 6,200 in 2017.

Restaurants Brand International Quarterly Net Income

Quarterly Net income of Restaurants Brand International 2015-2018

Amounts are in $ millions.

Year/QuarterNet Income
2018 Q1$ 279
2018 Q2$ 314
2018 Q3$ 250
2018 Q4$ 301
Year/QuarterNet Income
2017 Q1$ 167
2017 Q2$ 243
2017 Q3$ 247
2017 Q4$ 578
Year/QuarterNet Income
2016 Q1$ 168.3
2016 Q2$ 247.6
2016 Q3$ 238.6
2016 Q4$ 301.4
Year/QuarterNet Income
2015 Q1$ 50.6
2015 Q2$ 93.8
2015 Q3$ 182.9
2015 Q4$ 184.4

Restaurants Brand International (RBI) owns Tim Hortons, Burger King and Popeyes. The main source of income for the brand are the royalties it receives from the franchisees and the sales at the company owned restaurants.

Restaurants Brand International quarterly Revenue

Quarterly revenue of Restaurant Brands International 2015-2018

Revenues are in million dollars.

Year/QuarterRevenue (Millions)
2018  Q1$ 1,254
2018 Q2$ 1,343
2018 Q3$ 1,375
2018 Q4$ 1,385
Year/quarterRevenue (Millions)
2017 Q1$ 1,001
2017 Q2$ 1,132
2017 Q3$ 1,209
2017 Q4$ 1,234
Year/quarterRevenue (Millions)
2016 Q1$ 918.5
2016 Q2$ 1,040.2
2016 Q3$ 1,075.7
2016 Q4$ 1,111.4
Year/QuarterRevenue (Millions)
2015 Q1$933.3
2015 Q2$1,042.2
2015 Q3$1,019.7
2015 Q4$1,057

Restaurant Brands International (RBI) owns Tim Hortons, Burger King and Popeyes.

The main source of revenue for Restaurant Brands International (RBI) is the royalty it receives from the franchisees as well as the sales from the company-owned restaurants. Canada and the US are the leading markets of RBI.

Restaurant Brands International Revenue by Country

Revenue of Restaurant Brands International (RBI) by country 2014-2018

Canada is the biggest source of revenue for Restaurant Brands International followed by United States. The revenues are in $ Million.

YearCanadaUSOthers
2018$ 2,984 $ 2,832 $ 2,672
2017$1,785  $1,190 $1,004
2016$588  $554 $ 470
2015$ 2,623.2 $982.2 $446.8
2014$ 152.0 $630.9 $ 415.9 

Restaurant Brands International (RBI) owns Tim Hortons, Burger King and Popeyes. Its main source of revenue include royalties received from the franchisee resturants and the sales at comapny owned restaurants. In 2018, RBI revenue from Canada reached $ 2,984 million and from US $2,832 million.

RBI Annual Reports.

Popeyes revenue

Revenue of Popeyes 2015-2018

YearRevenue (Millions)
2018$3,732
2017$3,512
2016$3,287
2015$ 3,059.5

Popeyes was founded in 1964 and the brand has grown to become the world’s second largest quick service chicken concept based upon number of restaurants. As of December 2018, there were total 3,102 Popeyes Louisiana Kitchen restaurants operational worldwide. Its revenue in 2018 reached $3,732 million.

(RBI Annual Reports). 

Tim Hortons Revenue

Revenue of Tim Hortons 2012-2018 

Amounts are in $millions.

YearRevenue (Millions)
2018$ 6,869
2017$ 6,717
2016$ 6,405
2015$ 6,349.8
2014$ 6,616.0
2013$ 6,606.7
2012$ 6,447.3

Tim Hortons is a subsidiary brand of Restaurant Brands International. It was founded in 1964 and is one of the largest restaurant chains in North America and the largest in Canada. As of December 2018, Tim Hortons had 4,846 total restaurants. The total revenue generated by Tim Hortons including franchised sales and company sales reached $6.9 Billion in 2018 rising from $6.7 Billion previous year. 

Restaurants Brand International Revenue

Revenue of Restaurants Brand International 2010-2018

YearRevenue ($ Million)
2018$5,357
2017$4,576
2016$4,146
2015$4,052
2014$1,198
2013$1,146.3
2012$1,970.9
2011$2,339.9
2010$2502.2

Restaurants brand international owns Burger King, Tim Hortons and Popeyes. Its total revenue in year 2018 grew to 5.4 Billion dollars. RBI’s business generates revenue from the following sources: (i) franchise revenues (mainly royalties based on a percentage of sales reported by franchise restaurants and franchise fees paid by franchisees) (ii) property revenues from properties it leases or subleases to franchisees and (iii) sales at restaurants RBI owns (“Company restaurants”). Tim Hortons gets revenue from sales to franchisees related to RBI’s supply chain operations, that include manufacturing, procurement, warehousing and distribution, as well as sales to retailers. 

RBI Annual Reports.

Burger King Revenue

Revenue of Burger King 2013-2018

(Total Systemwide sales including revenue from company owned and franchised restaurants). Amounts are in $millions.

YearRevenue (Millions)
2018$ 21,624  
2017$ 20,075
2016$ 18,209
2015$ 17,303.7
2014$17,017.1
2013$16,301.0

The Revenue of Burger King chain of QSR restaurants was 21.6 billion dollars in 2018. Burger King is a subsidiary of Restaurant Brands International. Number of Burger King restaurants in 2018 was 17,796.

RBI Annual Reports.