Nike gets EMEA sales boost from Football World Cup in Q1 2018-19
today Oct 1, 2018
Sportswear, and football-related products in particular, are giving Nike a healthy boost in the EMEA region. In the first quarter of the 2018-19 financial year, Nike sales in the region grew 9%, reaching $2.607 billion, equivalent to €2.25 billion. In the period from June 1 to August 31, Nike’s footwear range, with a revenue of $1.642 billion, posted the same growth rate, 10%, as the apparel range, whose sales were $830 million. Profits in the EMEA region were also steadily on the rise, with an EBIT of €501 million, up 11% compared to the same period in the previous financial year.
The Football World Cup in June was one of the first quarter’s highlights for Nike, as both finalists, France and Croatia, were outfitted by the US sport giant. “Right after the World Cup Final, we launched our ‘Awaken the Phantom’ campaign, generating over 50 million page views in the first few weeks, and boosting sales as we introduced the latest products from our Phantom franchise,” said Nike’s CFO Andy Campion.
Nike is relying very much on football-related products in the region, as shown by the brand’s decision to outfit the Paris Saint-Germain football club with a Champions League match kit by Jordan, a label which was initially focused on basketball only. “The launch was a huge success, and the products sold out in a flash,” added Campion.
“One of the underlying drivers of our sustained EMEA growth is the uniform strength of our brand across the whole of this highly diverse region. Five of our twelve key cities are located in the [EMEA] region, and in each of them Nike is ranked number one by consumers, and our growth rate is higher than the local market’s,” said Campion, who explained that sportswear is Nike’s regional powerhouse, outperforming even the fast-growing running segment and the Jordan label.
EMEA’s revenue growth must be compared to the more moderate one posted in North America (+6%) and the more explosive one recorded in Greater China (+20%).
In the first quarter, the group’s total sales increased by 10% (and by 9% at constant exchange rates), reaching $9.9 billion, with $9.4 billion generated by the Nike brand (+10%) and $527 million (+7%) for Converse. According to Andy Campion, it is the group's new ‘triple double’ strategy that enables Nike to grow at such a sustained pace.
One of the strategy’s mainstays, labelled ‘2xDirect’, is the search for a stronger connection with consumers, especially online, a channel whose sales skyrocketed by 36% worldwide in the first quarter, but in brick-and-mortar retail too, via the new Nike Live connected store concept. The latter was recently deployed in Los Angeles, and is next expected to launch in New York, Shanghai and Barcelona, where, according to the Europa Press agency, it should be introduced in 2019. And possibly on the Champs-Elysées in Paris too, where the world’s number one sportswear group recently bought the premises at number 63, previously owned by Toyota.
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