NIKE Expects Mid-teens EPS Growth On Average Over Next Five Years

(RTTNews) - NIKE Inc. (NKE) hosted its 2017 Investor Day today which provided an overview on how the Company is accelerating its next phase of long-term, sustainable and profitable growth. Fueled by the Consumer Direct Offense, the Company stated during the investor meeting that it expects to drive high-single digit revenue growth, expanding margins and mid-teens earnings per share growth on average over the next five years.

The company expanded on its new Consumer Direct Offense which aims to serve the athlete faster and more personally, at scale, led by digital. With focused growth through key categories this new offense will connect the NIKE Brand and products with consumers in new and more powerful ways across 12 key cities and 10 key countries.

The Company noted that it is investing in its Triple Double Strategy to drive growth through three core areas of the business. These three core areas include: 2X Innovation, 2X Speed, 2X Direct.

The company announced its new NikePlus membership program that will provide member-only access to the products members love, matched to their individual preferences and buying patterns.

The Company unveiled five measures of success that reflect the operational drivers of NIKE's long-term financial model and will guide its investment approach over the next five years. These five measures are: New innovation platforms are expected to drive over 50 percent of revenue growth; Revenue generated from digital platforms, both owned and partnered, is anticipated to increase from nearly 15 percent in fiscal year 2018 to more than 30 percent; Speed-to-market is anticipated to double as NIKE reduces the overall product creation timeline by over 50%; Leveraging the Triple Double Strategy is expected to drive higher, more consistent full-price sell-through in season; Ensure consumers in our 12 key cities and 10 key countries rate NIKE as their #1 favorite brand.

The Company stated during the investor meeting that, by geography, it expects to grow North America in the mid-single digit range, Europe, Middle East & Africa (EMEA) in the mid-to-high single digit range, Greater China in the low to mid-teen range, and Asia Pacific & Latin America (APLA) in the high single-digit to low double-digit range, in each case on average over the next five years.

The Company expects to reinvest three to four percent of NIKE, Inc. revenue over the next five years through capital expenditures and expects the target range for Return on Invested Capital to average in the low 30 percent range. Finally, the Company expects to continue to increase shareholder returns by maintaining a 25 to 35 percent dividend payout ratio coupled with share repurchases.