Consumer focused strategy to help grow NIKE brand

06 May '10

5 min read

NIKE, Inc. unveiled its strategy and key initiatives to achieve sustainable, long-term growth across its global portfolio of brands and businesses. During its investor meeting in New York, the Company announced a revenue target of $27 billion by the end of fiscal 2015 based on growth expectations across its portfolio, which includes the NIKE Brand, Cole Haan, Converse, Hurley, Jordan Brand, NIKE Golf and Umbro. Additionally, the Company believes it can generate over $12 billion of cumulative free cash flow from operations through 2015. Both goals extend NIKE, Inc.'s long-term financial model of high single-digit revenue growth, mid-teens earnings per share growth, and expanding returns on capital.

"We've never been more inspired, innovative and aligned to achieve our goals," said NIKE, Inc. President and CEO Mark Parker. "We have powerful competitive advantages in our portfolio - innovative and compelling products, brands that are distinct and relevant to their consumers, and the world's greatest athletes and teams. Our focus is to build, fuel and accelerate the power of our portfolio."

The NIKE Brand is the most powerful asset in the NIKE, Inc. portfolio, accounting for approximately 85 percent of total revenue. NIKE, Inc.'s Other Brands continue to increase their contribution to the Company's overall growth strategy. "With our acquisition of Umbro, NIKE has extended its position as the biggest football Company in the world," Parker said. "Hurley continues to outperform everyone in its market; Cole Haan has tremendous opportunity for growth; and Converse, nearly a $1 billion business, has developed strategies to double its revenue by 2015."

NIKE Brand Overview
NIKE Brand President Charlie Denson provided an overview of how NIKE's consumer-focused category strategy is driving growth through increased market place capacity and penetration, "NIKE is the most connected, authentic and distinctive brand in the industry." Denson continued, "Our consumer focused strategy enhances our ability to deliver great product and elevated consumer experiences which will help grow the NIKE Brand to approximately $23 billion by the end of fiscal 2015."*

NIKE Brand - Category Offense

• Action Sports - comprised of NIKE 6.0 and NIKE SB, is the fastest growing category within the Nike Brand. The Company anticipates doubling its current estimated $390 million business by 2015.
• Athletic Training - started more than 20 years ago with the advent of NIKE cross training. This business, estimated at $1.4 billion, continues to redefine performance with key innovations like NIKE Pro base layer apparel and the Trainer1 shoe.
• Basketball - led by the strength of the Jordan Brand and excellent opportunities in the United States and China, NIKE's basketball business is currently at approximately $1.7 billion in revenue.
• Football - with NIKE Brand Football revenue of approximately $1.7 billion, the Company is launching its largest-ever presence at a World Cup including new footwear, national team kits, and NIKE Football+.

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