On Wednesday, October 14, NIKE, Inc. broadcast its 2015 Investor Day meeting from World Headquarters in Beaverton, Oregon.
10:23 am Mark Parker, NIKE, Inc. President and CEO, opens the day by stating the company’s expectation to deliver $50 billion in revenues by the end of fiscal year 2020.
“Today, we’re showing how Nike is built for growth – now and for years to come,” says Parker. “We lead because we serve the athlete and consumer completely – through breakthrough product and personal experiences, all around the world. As we look toward 2020, we are accelerating the pace of innovation across every area of our business to deliver the very best to athletes everywhere – when and where they want it.”
To facilitate this growth, the company will accelerate digital investments, partnerships and advanced manufacturing capabilities, which will include, Parker reveals, the opening of the Advanced Product Creation Center at Nike World Headquarters.
10:43 am Trevor Edwards, President of the Nike Brand, details how Nike’s personal and premium digital experience serves a shifting marketplace of on-demand consumer expectations, expediting the company’s growth. Nike Brand’s e-commerce business today surpasses $1 billion, with growth expected to reach $7 billion by the end of fiscal year 2020. Nike Women’s, which is now a $5.7 billion business, expects growth to $11 billion by the end of fiscal year 2020. Additionally, through its user-fueled digital ecosystem, the brand creates rich and rewarding connections that make Nike+ “the home of your athletic life.”
11:10 am Jeanne Jackson, President, Product and Merchandising, discusses how Nike invests in innovation to create beautiful, head-to-toe integrated performance systems.
Jackson also announces a unique partnership with DreamWorks and its newly formed technology company, NOVA. Using the NOVA visualization platform, Nike is building a 3D digital design system that will transform our product creation process. The partnership will deliver cutting-edge capabilities, such as nearly instantaneous digital print applications, photo-real 3D visualizations and ultra-rapid prototyping.
11:30 am Jayme Martin, VP/GM of Global Categories, outlines the company’s Category Offense. The strategy connects consumers physically and digitally 24/7, 365 days a year to Nike products and services. It utilizes Nike’s global reach to scale local and personal insights.
This close connection to athletes drives accelerated growth in multiple categories. Running and Jordan Brand have both more than doubled in size since 2013, with Running expected to reach $7.5 billion by the end of fiscal year 2020 and Jordan projected to scale globally to reach $4.5 billion in the same timeframe.
12:46 pm Elliott Hill, President, Geographies and Sales, and Christiana Shi, President, Direct-to-Consumer (DTC), outline Nike’s global integrated marketplace strategy, comprising Nike.com (including mobile), brick-and-mortar stores and unique concepts at multi-brand partner retailers.
The consumer-led, segmented strategy energizes categories and local markets by delivering a targeted mix of products, services and environments. Specific examples and deliverables of the integrated marketplace can be seen in North America, which is expected to grow to $20 billion by the end of fiscal year 2020, and Greater China, which projects revenue growth to $6.5 billion by the end of fiscal year 2020. Overall, Nike anticipates $16 billion in DTC revenue by the end of fiscal year 2020.
1:28 pm Eric Sprunk, Chief Operating Officer, describes how advances in Nike’s manufacturing revolution transform what the company makes and how it makes it – through lean manufacturing, manufacturing modernization and manufacturing innovation, such as Flyknit, ColorDry and 3D printing to produce progressive cushioning systems.
Sprunk underscores how Nike’s new 125,000-square-foot Advanced Product Creation Center at its World Headquarters will connect methods of make directly to innovation and design teams to accelerate the conception-to-creation process.
Sprunk next announces a partnership with Flex, a $26 billion world-class manufacturer with expertise in design, medical, engineering, manufacturing and global supply chain management, with sketch-to-scale solutions. The partnership will allow Nike to deliver footwear innovation to consumers more quickly, with more customization options.
2:00 pm Andy Campion, EVP and Chief Financial Officer, wraps the day by dimensionalizing the company’s growth strategy through continued annual revenue growth in the high-single to low-double digit range over the next five years; annual gross margin expansion of 30 to 50 basis points; and sustained earnings per share growth in the mid-teens over the next five years. Nike will also continue to target total returns to shareholders in the top quartile of the S&P 500, with a dividend payout ratio of 25-35% over this same period.