Nike reports net income up by 5 percent
Nike reports its net income rose 5 percent to 698 million US$ from 662 million for the final quarter ended May 31 as strong gross margin and sales growth offset heavy World Cup spending. The world market leader’ revenues were up 11% to 7.426 billion US$ from 6.697 billions. The company says its gains were fueled by new products, as well as strong social media platforms and its digital advertising strategy, including the “Risk Everything” campaign. In a conference call announcing the results, Nike executives credited its success, at least in part, to social media and digital marketing.
“An ongoing two-way dialogue with consumers is a critical element of our digital ecosystem,” says Mark Parker, president and CEO. “It provides us insights that drive innovation, strengthens consumer connections to our brands, and provides a platform for consumers to interact with each other. Through our social media platforms, we leverage the power and passion of sport to deepen our relationship with our consumers.” The Beaverton, Oregon-based company says increases in marketing spend leading up to the World Cup, as well as key product initiatives, drove its demand creation costs up a whopping 36% to 876 million Dollars. It says it expects those costs in the first quarter to be up some 30%, “as we continue to leverage the energy of the World Cup.”
This article was republished with permission from Karl-Heinz Huba, the editor and publisher of the Sport Intern.