Activewear giant Nike Inc. has decided it’s better to work with Amazon than against it.
Nike chief executive officer Mark Parker told Wall Street on Thursday that the company would offer a “limited Nike product assortment” on Amazon.com’s platform, looking for ways to improve the consumer experience by “elevating the way the brand is presented and increasing the quality of product storytelling.”
The company also turned in fourth-quarter profits that topped expectations.
Nike is already widely available on Amazon through third-party sellers, but the smorgasbord has led to an overall presentation that’s much more uneven than, say, competitor Under Armour Inc., which already works with the e-commerce company.
“We’re in the early stages, but we really look forward to evaluating the results of the pilot,” Parker said.
The move, which had been widely speculated about over the past week, is significant in part because it makes Nike one of the largest and most prominent brands to work directly with Amazon, which, under the leadership of Jeff Bezos, has become both a massive sales venue and stiff competitor. Amazon, for instance, is in the process of launching its own activewear business, which could compete directly against other leading athletic brands.
Nike already has a massive online business — sales through its apps and nike.com top $2 billion and it is sold on Alibaba’s Tmall in China and Zalando in Europe — but Amazon is still too big to ignore in the U.S. According to research by BloomReach, the site is the starting point of 55 percent of all online product searches in the U.S.
If investors did have any jitters about Nike moving closer to Amazon, which is viewed with great trepidation by many brands, they seemed to be eased by solid quarterly results.
Nike’s fourth-quarter profits rose 19 percent to $1.01 billion, or 60 cents a diluted share, as revenues increased 5 percent to $8.68 billion.
That put earnings per share 10 cents ahead of the 50 cents Wall Street was projecting, prompting something of a sigh of relief among investors and a 4.7 percent gain in Nike shares, which rose to $56.80 in after-hours trading.
Not all was good news for Nike, though: The company’s North American apparel sales fell 2 percent to $1.14 billion in the quarter and were propped up by the larger footwear segment, which grew 4 percent to $2.46 billion.
This fiscal year, Nike said it’s looking for revenues to grow in the mid- to high-single digits.
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