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Nike ready for challenges
Industry to feel margin pressure as economy recovers, with Nike in a strong position to leverage innovation to overcome challenges
Mark Parker, Nike president and chief executive officer, said the company is in a strong position to cope with margin pressures caused by rising input costs as the global economy recovers.
Nike reported revenue up 10 per cent during its Q2 results in the 2010-11 fiscal year, reaching $4.8bn.
Net income increased 22 per cent to $457m, and inventories were $2.3bn, up eight per cent from November 30, 2009.
Futures orders for delivery from December 2010 through April 2011, totalled $7.7bn, 11 per cent higher than orders reported for the same period last year.
Speaking after the results were reported, Parker said: “As supply and demand find a new normal in the recovery economy, our industry is going to experience margin pressure due to rising input costs.
“While the impact of these cost pressures has been delayed for us, these factors have not diminished. We expect to see these external forces play out for the remainder of the fiscal year.
“However, the same competitive advantages that fuel our long-term growth give us the levers we need to help manage the impact of macro forces over the coming quarters.”
Parker continued: “We leverage the same competitive advantages that have driven Nike growth consistently throughout our history; putting the consumer first, fixating on innovative product and leveraging the power of our portfolio. By getting great athletes, we have strong fundamentals, we're able to anticipate and react to opportunity and we stay on the OpEx. That's what leaders do; stay flexible and balanced.
“Flexibility gives us options and that keeps us targeted, aggressive and opportunistic. We're also very focused on balancing our resources against our biggest opportunities. This is especially powerful when we leverage innovation to drive growth. We're creating more opportunity with innovation than ever before. That's true in our products and our categories and it's true on how we run the business.”
Parker added: “We're delivering innovation to the competitive athlete and we're taking that performance ethos across to the style side of the business. That's key to being compelling and distinctive in the market. Innovation also drives how we run the business and how we invest to prepare for long-term success. Sustainability is a great example. We are very active in this space. Lean manufacturing, open-source innovation, renewable energy, close-loop manufacturing, these are some of the commitments we are making now for the future. We're not waiting. This is good for the planet and it's important to the success of our business.
“In an increasingly resource-constrained world, the more proactive we are, the more nimble and profitable we become. So when I look at our innovation pipeline, I see a lot more than footwear and apparel. I see a relentless flow of ideas and opportunities to serve our consumers, our business, our shareholders and our potential. I am very proud of what we've done and very excited about what's on the way.
“Finally, we put the consumer at the centre of everything we do and we align ourselves to that consumer. Nike is a company of highly distinctive brands. For us to perform at our best these distinctions need to be clear and compelling wherever we interact with consumers.”
