Nike to invest further in speeding up supply chain - Just Style
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Nike to invest further in speeding up supply chain

By Georges Corbineau 02 Oct 2018

US sporting goods giant Nike will continue to invest in speeding up its supply chain capabilities during fiscal 2019, a group of investors has been told, in the wake of the company's first-quarter results.

Nike to invest further in speeding up supply chain

US sporting goods giant Nike will continue to invest in speeding up its supply chain capabilities during fiscal 2019, a group of investors has been told, in the wake of the company’s first-quarter results.

The earnings, which were released last week (25 September), revealed the Jordan’s and Air Max maker had increased net profit by 15% to US$1.1bn year-on-year, driven by revenue growth which was up 10% to $9.9bn for the period ending 31 August.

CEO Mark Parker applauded the group’s ‘Express Lane’ initiative, which he said has driven “double-digit growth in many of our key cities.”

Express Lane launched in 2016 with the aim of speeding up the supply chain process and delivering products to market faster. The process involves reducing creation-to-market timelines from months to weeks, working as “an important competitive advantage” for the sportswear group. 

Parker said during the call, Express Lane continued to be “the engine that’s creating the most agility in our supply chain.”

“We’re sharpening our sensing capabilities and developing a fully responsive product manufacturing [operation],” he explains. “We’re actively building a portfolio of innovation and automation that impacts the entire spectrum of our process. Our goals are ambitious and we have high standards. Our vision is to leverage automation to deliver amazing innovative products, faster and more responsively while being more sustainable and cost-efficient.”

Andy Campion, chief financial officer, suggests the group will be further investing in speeding up supply chain operations during fiscal 2019, which would be achieved via digital demand sensing, consumer data and analytics, connected inventory, digital product design and creation, a digital content engine and a new enterprise resource platform.

“There is no finish line for Nike, particularly as it relates to digital. So, we will continue to invest in the capabilities that will differentiate and create a competitive advantage for Nike long-term. Those capabilities include product innovation, brand marketing, digital, and speed within our supply chain,” he adds.

Analyst John Kernan of Cowen Equity research welcomed the news: “Beyond just an acceleration in revenue and improved product cycle, Nike’s vision, delivered by the management team and during each touch point with investors since, continues to support a higher multiple in its stock. Their view of the future of digital, innovation and supply chain paints a robust narrative and story to support the stock.”