NIKE Targets $50 Bln In Revenue By End Of FY20; Updates Long-term Growth Plans

(RTTNews) - NIKE Inc. (NKE) provided an overview of its progress on key strategic initiatives to achieve sustainable, profitable long-term growth. During an investor meeting at its world headquarters near Beaverton, Ore., the Company announced a revenue target of $50 billion by the end of fiscal year 2020. Additionally the Company shared its long-term financial model of high single-digit to low double-digit revenue growth, mid-teens earnings per share growth and expanding returns on invested capital.

The company updated its projected long-term growth plans in the NIKE Brand geographies through fiscal 2020. For its more developed geographies (North America, Western Europe and Japan), NIKE now expects to generate average annual growth at a high single-digit rate over the next five years. The Company expects North America to reach $20 billion in revenue by the end of fiscal year 2020.

For its developing geographies (Emerging Markets, Greater China, and Central & Eastern Europe), the Company stated it expects to grow at a low double-digit average annual growth rate for the next five years. The Company expects its Emerging Markets geography to grow at a low double-digit average annual growth rate and for Greater China to grow at a mid-teens growth rate over the next five years, reaching $6.5 billion in revenue by the end of fiscal year 2020.

The Company provided an overview of its plans to drive growth in its NIKE Brand Direct to Consumer (DTC) operations. Driven by its digital business as well as inline and factory stores, the Company now anticipates achieving $16 billion in revenue by the end of fiscal year 2020. Over the next five years incremental growth in DTC revenues is expected to be driven by e-commerce sales, which are projected to grow to $7 billion. The Company also expects to drive wholesale growth in the mid-to-high single-digit range over the next 5 years.

The Company expects its Women's business to reach $11 billion in revenue by the end of fiscal year 2020. It expects the Running category to grow to $7.5 billion by the end of fiscal year 2020. The Jordan Brand, which will be reported separately from the NIKE Basketball category going forward, is expected to nearly double in size, to $4.5 billion, by the end of fiscal year 2020.

The Company stated its primary financial objectives through the end of fiscal 2020: average annual Revenue growth is expected to be in the high-single to low-double digit range. Average annual earnings per share growth is anticipated to be in the mid-teens range.