Nike sales soar amid executive exodus
Nike's reportedly toxic workplace doesn't seem to be affecting sales. The Beaverton, Oregon sportswear giant reported strong earnings results on Thursday afternoon, reversing three quarters of declines in North America in particular. The earnings follow months of internal turmoil for the brand stemming from complaints of a poisionous work environment for female staffers, a boys' club culture and a mass exodus of several executive-level employees.
For the fourth quarter, Nike revenue rose 13 percent to $9.8 billion; for the year, revenue rose 6 percent to $36.4 billion. North American revenue, which had been in decline, returned to the black with a 3 percent rise for the quarter. The brand's net income was $1.1 billion, up 13 percent over the year-earlier period.
Chief executive Mark Parker called out digital expansion, particularly with the company's Nike Plus membership base, a new partnership with the NBA, and growth in the women's business as factors helping to fuel the sales increases. The company also has a new concept store opening Los Angeles and is planning to expand its presence on social media platforms to amplify the shopping experience.
In 2019, Nike will be "prioritizing digital, products and brand marketing," exec VP and chief financial officer Andy Campion said on an earnings call with analysts Thursday. In the quarter, "demand creation expense," which includes sports marketing investments, new product launches and brand campaigns, were $983 million, up 25 percent.
In recent months, Nike has lost roughly a dozen executives, most notably Trevor Edwards, who had been brand president and an expected heir to Parker. In May, the purge included a global VP of marketing for performance categories and a director of sports marketing.
While the Nike brand is on an upswing, its Converse division is still suffering a sales decline. For the quarter, Converse reported a 14 percent drop in revenue to $512 million. Converse, which has a new chief marketing officer, Sophie Bambuck from Nike, is now working with longtime Nike agency Wieden & Kennedy. It also recently tapped Initiative for global media work.