World Cup 2014
At NIKE, we earn our place with consumers every day. The World Cup is a great example of how we harness the power of sport to deepen the relationship between consumers and the NIKE brand.
We introduced more revolutionary product innovations in this World Cup than in any prior, and we’re proud of the fact that more players wore NIKE boots on the pitch than all other brands combined. Nearly a third of those players wore Flyknit boots. That’s amazing.
We delivered products to consumers in compelling retail experiences all over the world, from our first football-only store in Copacabana, Brazil, to the NIKETowns in London and New York, to football-focused executions with our wholesale partners around the world.
With great football product, compelling retail presentation, and strong consumer engagement, we drove great results. All told, global football revenue grew at a strong double digit rate in Q1, and as of the end of the quarter, we had the leading footwear market share in the nine largest football markets around the world.
Next, I’d like to highlight running. Our relentless drive to serve our athletes gives us an unmatched ability to meet their needs as they compete, train, and express themselves. Our Q1 results demonstrate this with double-digit revenue growth, driven by premium footwear and apparel.
In footwear, the Pegasus 31, the LunarGlide 6, and the Free Flyknit have all sold-through exceptionally well. In apparel, our Dri-FIT knit, with its seamless construction and comfortable fit, has continued to resonate with consumers. And in sportswear, we continue to showcase our deep heritage with products like the Air Max Lunar 1, the NIKE Tech Windrunner jacket, which delivered strong results.
Like the athletes we serve, we look for ways to continually improve. We see tremendous growth opportunities for running around the globe, and we look forward to another season of great events, starting this fall, with the NIKE Women’s Half Marathon in San Francisco, followed by marathons from Chicago, to Amsterdam, to Shanghai.
Now, I’d like to talk about our women’s business, which continued to grow faster than men’s. Q1 revenue for women’s grew at a strong double digit pace as we focused on realizing the significant potential in this large and growing business.
It all starts by engaging and inspiring consumers, and here are some key examples. The NIKE+ Training Club has been downloaded nearly 17 million times, and has become a personal trainer for women around the world. And we’re also inspiring women with live experiences every day. 70,000 members participate in NIKE Run Clubs across the globe, and more are joining daily.
We also lead the women’s market by continuing to deliver innovative products such as the performance footwear for the gym, like the NIKE Free Trainer 4.0; premium apparel such as the NIKE Sculpt Tights and the NIKE Pro Bra collection, which saw exceptional sell-through, and iconic franchises that remain incredibly popular, like our Air Max footwear and Sportswear Tech Pack apparel.
Lastly, we serve these consumers in increasingly dynamic retail environments. We’re experiencing tremendous growth online, led by NIKE.com, and in store, driven by sharper assortments and the continued expansion of the NIKE Training Club concept to in-line stores. And our printed and digital style guides are a key accelerator leading to increased conversion. All told, it is this complete offense that is driving impressive results for our women’s business.
Let me turn to a number of our key geographies. First, Western Europe, where our incredible business momentum continued into the first quarter with revenues up 25%. Our revenue growth was broad-based, with every key category and territory reporting double-digit growth.
There is tremendous energy around the brand in Europe, with innovative products that are resonating with consumers. We saw strong results from both performance footwear and apparel, as well as in sportswear.
A critical component to unlocking this growth is the work we have done in the marketplace. By creating category specific retail destinations with partners like JD Sports, Foot Locker, and Intersport, we have differentiated the NIKE brand with consumers.
We also leverage our own DTC business, including Nike.com, as a key component of a segmented marketplace. We continue to evolve our DTC strategy and the market share gains in nearly every territory send a strong signal that our efforts are working.
Next, the emerging markets, where revenues increased 10% in the quarter, with most territories growing in Q1. In Brazil, the World Cup was a tremendous success for the NIKE brand. Our ability to connect with consumers was unmatched, and our enthusiasm for the long term potential of this critical market remains unchanged.
That said, the recent weakening of the Brazilian economy requires us to carefully manage the marketplace, to keep it healthy and productive for NIKE and our retail partners. While we are not immune to macro conditions, we are focused on maintaining strong brand momentum and deepening consumer connections as we work to elevate the marketplace for continued growth.
In Mexico, as discussed in previous quarters, distribution challenges led to an inconsistent flow of product into the marketplace. While the NIKE brand continues to resonate with consumers, inventory levels at retail are higher than we would like given the slower sell-through in certain channels.
In response, we are carefully managing the flow of product into the marketplace. At the same time, we are working with our wholesale partners to clear excess inventory already in the market. This is to ensure a healthy pull market in Mexico for the long term.
By staying closely attuned to consumer and marketplace dynamics, we seize opportunities and address challenges as they arise. Overall, we continue to see tremendous potential for long term profitable growth in the emerging markets.