Nike Enjoys Profit Jump After World Cup
Thanks to the World Cup 2014, the world’s largest sportswear company, Nike, has enjoyed a tremendous profit jump.
In the three months leading up to August, net profit rose for the company by 23%, to $962 million (£590 million). During the same period, revenue rose to $8 billion (£5 billion), an increase of 15%.
Nike spent heavily on marketing for this year’s World Cup, making it the first time that the company sponsored more national teams than its main rival, Germany-based Adidas.
The US sportswear company also sponsored the most individual players, with more boots displaying that distinctive ‘tick’ on the pitches than all of the other brands combined. And nearly a third of those wearing Nike, were wearing the company’s Flyknit boots.
Company shares in the US also jumped in after-hours trading by 6.5%.
Trevor Edwards, brand president for Nike, said that the brand has been particularly popular in Europe, with fluctuations jumping to around 15% for orders of clothing and shoes to be delivered between September and January. Worldwide, future orders have jumped by 11% compared with the same period last year.
“We saw strong results from both performance footwear and apparel as well as in sportswear,” Mr Edwards said. “As of the end of the quarter, we had the leading footwear market share in the nine largest football markets around the world.”
And it seems that all aspects of Nike are doing well. Converse, another brand belonging to Nike, also saw a rise in revenue, up 16% to $575 million (£354 million).
What seems to make Nike’s profit and revenue jumps all the more significant is that both Adidas and English company Reebok aren’t reporting the same kind of good news.
“When you look around the world, there really isn’t much competition,” explained Brian Yarborough, an analyst at Edward Jones. “Adidas is struggling, Reebok is struggling.”
Hopefully, things will turn around for those two firms as well, but for the moment, Nike can bask in the glow of victory.
In the words of Nike CEO Mark Parker: “Fiscal year 2015 is off to a strong start.”