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Nike Inc. has set the performance bar high.
This story first appeared in the October 10, 2013 issue of WWD. Subscribe Today.
Mark Parker, president and chief executive officer, said the company could add nearly $11 billion in sales by 2017, raising its revenues to $36 billion.
A big part of that will come from apparel, which is expected to expand to $10 billion in annual sales in three years, up from $7.5 billion for the fiscal year ended May 31.
This is on pace with the recent trend, which has seen Nike-branded apparel sales expand by nearly 40 percent over the past three years.
“We’ve been growing our women’s [apparel] business faster than we have our men’s business,” Parker said at a meeting with investors Wednesday. Nike’s overall women’s business is expected to hit $7 billion in 2017, up from $4 billion in 2013.
The ceo and other executives were pitching the athletic giant, which already has over $25 billion in sales, as a growth company. Shares of the firm rose 0.9 percent to $70.89 — giving it a market capitalization of $63.05 billion.
Parker said Nike’s sales this year would hit $30 billion, the upper end of its previous projection calling for sales of $28 billion to $30 billion.
“There is more opportunity for Nike today than at any point in our history,” Parker said. “Over the next decade, we will see the world’s middle class grow by over one billion consumers.” Much of this growth will come from countries such as Brazil, Russia, India and China.
Trevor Edwards, president of the Nike brand, said the brand’s strength flowed from its focus on sports, which provides both excitement and technical inspiration as the company seeks to meet the performance needs of top athletes.
The brand also has its sights on the digital world.
Edwards projected that sales on nike.com would nearly quadruple to $2 billion by 2017, up from sales of $540 million last year.
“The consumer landscape continues to see tectonic shifts created by the impact of digital,” Edwards said. “The young consumer lives in a digital world. Digital is like oxygen. It’s omnipresent and indispensable. It’s everywhere and it’s always on.”
Nike executives also hammered hard on the company’s efforts to innovate — from the Flyknit sneaker to the FuelBand digital tracker to Dri-fit apparel.
This itch to innovate extends to its manufacturing efforts as well, where Nike is using more sustainable techniques that are less labor intensive and produce less waste.
Eric Sprunk, chief operating officer, said Nike was working on a “manufacturing revolution.”
While not getting too specific, Sprunk asked investors to imagine if a broad base of customers could buy a highly customized pair of shoes — tailored individually to one’s right foot and one’s left foot — that was manufactured locally and delivered within hours.
“We don’t just imagine it,” he said. “We’re planning for it.”