Nike's digitisation strategy drives on in H1 2019

Beaverton, Oregon – Nike had $11.6 bn sales in its footwear division in the first half of 2019, up $1.1 b or 10% from the equivalent 2018 half.

Across the company, earnings before interest and tax rose by 16% from $2 bn in the first half of 2018 to $2.3 bn in the first half of 2019.

Gross margin of 44% was 1% higher in Q2 2019 than in Q2 2018. Nike said that, this was driven by higher average selling prices, and margin expansion in the NIKE Direct business. This growth was partially offset by higher production costs.

In the 2018 quarter, selling and administration expenses rose by 14% to $3.1 bn. This was partly as a result of $910 m being spent on ‘demand creation expenses’. These were up on the year earlier period because of higher advertising and marketing expenses. The company spent more on wages which 'reflect critical investments to drive key transformational initiatives.

Mark Parker, Nike chairman said that sales were developing strongly because of his company's 'ambitious digital strategy… driving strong results and momentum in North America and our international geographies.

'We're incredibly energised about 2019 with the most personal, responsive retail experiences in the industry; and a supply chain that is delivering at speed and scale,' he added.