Despite growing concerns that the brand is losing its appeal, Nike Inc. maintained an ambitious outlook for its business at an investor day Wednesday — the first such event the company has held since 2015.
Chairman, CEO and president Mark Parker’s optimistic posturing at the daylong presentation — which featured an appearance from five-time NBA champion Kobe Bryant — were enough to send the firm’s shares gaining into today. As of 11:45 a.m. ET, Nike shares remained up more than 3 percent at $56.75.
In addition to reinforcing the $50 billion revenue target that many market watchers expected the firm to abandon amid slowing sales, Parker laid out several aggressive goals Wednesday.
Read on for three major predictions from Nike’s chief executive.
Digital & Direct Will Reign
“We expect that digital revenue, both owned and through partners, will increase from nearly 15 percent today to over 30 percent,” Parker told investors of the company’s e-commerce and mobile commerce goals.
Nike’s chief also noted that the company was early to double down on its digital investments “because we did believe that that’s where the market was going.”
“Having said that, we have seen that actually shift at an even faster pace,” Parker added. “For us, it’s always trying to get ahead of where we see the market going and make sure we’re doubling down on where we believe the market will go … [Direct-to-consumer] is the future. So I think some of these things, we might have started them. Now the acceleration is happening at a much faster pace, and our task is to constantly go even harder on the things that we know are critical.”
In other words, Nike will put a larger effort behind it’s own e-commerce platform. Key cities for its consumer direct plan are New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul and Milan.
International in the Driver’s Seat
“Nearly three-fourths of our growth will come from outside the U.S.,” Parker said.
By geography, Nike expects to expand in North America in the mid-single-digit range; Europe, Middle East & Africa (EMEA) in the mid- to high-single-digit range; Greater China in the low- to mid-teen range; and Asia Pacific & Latin America (APLA) in the high-single-digit to low-double-digit range, in each case on average over the next five years.
The Value of Innovation & Speed
“We expect that over the next five years, over 50 percent of our growth will originate from new innovation concepts that will scale across multiple categories,” Parker said.
The CEO reiterated Nike’s previously unveiled “triple-double” strategy, comprising three key investment areas: innovation, speed and direct.
“We will lead with more distinct platforms, moving from seeding to scaling a lot faster,” Parker said of innovation. “We’ll edit to amplify to give consumers better choices to match their preferences. And we’ll set a new expectation for style, creating a new aesthetic to wear in all moments of their lives. To the consumer, there is no trade-off between sport and style. We know that more than half of the athletic footwear and apparel is bought for nonsport activities, and we have even more room to grow in this market.”
For speed, the company hopes to double speed to market by reducing the average product creation timeline by over 50 percent through investments in end-to-end digital capabilities.