Back-To-School, Black Friday Boost NIKE Footwear Sales

NIKE’s (NKE) North American market accounted for 45% of footwear revenues, or $1.9 billion, in 2Q15.[1. Quarter ending November 30, 2014 – Fiscal year ends on May 31, 2015] Footwear revenues grew by 18.1% year-over-year, outpacing overall revenue growth of 14.7% in the quarter.

The back-to-school period is one of the highest revenue-grossing periods for athletic footwear products. Brands NIKE and Jordan accounted for nine of the top-ten selling footwear models during this period, which spans from the last two weeks of July until the first two weeks of September. Only Under Armour’s (UA) UA Highlight MC cracked the top ten, coming in at #6.[2. Forbes’ Sneakernomics, Matt Powell]

Product growth was particularly robust in the running and basketball categories. Running shoes remain the company’s largest footwear category. NIKE reported mid to high single-digit growth worldwide in this category. All premium footwear products continued to perform well, including the Pegasus and the LunarGlide.

Basketball is estimated to account for ~25% of all athletic footwear sales in the US. This category is also growing faster than the overall market, with sales up 21% in the twelve months ending April 2014, compared to a 4% decline in the overall market.[1. NPD Group]

Despite Adidas (ADDYY) being the official provider of apparel and footwear for the National Basketball Association, NIKE dominates the basketball footwear market in the US with a market share of ~97%.[1. Morgan Stanley, Sportscan] It’s Jordan brand and tie-ups with other basketball players including LeBron James have helped the company dominate the segment.

NIKE reported its 13th straight quarter of double-digit growth in basketball footwear. The success of the Jordan brand continued, with products such as the Air Jordan 29 and the re-launch of the Retro Jordan 6 on Black Friday. Other key styles that performed well during the quarter include the LeBron 11 and the KD7.

The iShares S&P 500 Growth Index ETF (IVW), the Vanguard Total Stock Market ETF (VTI), and the iShares Core S&P 500 Index ETF (IVV) have exposure to NIKE (NKE).

The next part of this series looks at NIKE’s performance in the fast-growing apparel segment. We’ll also examine market share changes seen by the company and its competitors in the last quarter.