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 Performance in fiscal 2019 versus 2018

Apart from Nike brand products, the company also sells Hurley, Jordan and Converse products. 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 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.