Nike’s management has confirmed a pilot project with Amazon, which will allow the retailer to sell a limited number of assorted merchandise on the US ecommerce platform, Amazon.
Nike to Partner With Amazon For Pilot Program to Sell Merchandise
The deal between Amazon and Nike will see Nike directly sell accessories, apparels and athletic footwear directly on Amazon.
For decades, Nike had refused to make such a deal and instead decided to put in more effort into its digital selling platforms. However, earlier this week, reports began to emerge that Nike would reconsider its business operations.
In exchange for selling on Amazon, Nike will benefit from more stringent policing of counterfeit products and limitations on unauthorized selling of Nike products.
In a conference call with analysts and investors, Nike CEO Mark Parker said Nike was looking to improve consumer experience on Amazon, emphasizing that this was only the initial stages of the deal and that the retailer will continue to assess sales performance.
Nike also reported that sales growth for the full year and for the latest quarter have primarily been driven by the international sales and direct to consumer operations.
CEO Parker further said, “In today’s dynamic environment, Nike continues to create short term and long term wins for future growth.”
“We are putting even more effort behind our greatest opportunities for fiscal year 2018 as this will be a big year for innovation and through deeper consumer connections, we’ll bring those stories to life in our key cities around the world.”
In the fourth quarter, Nike’s net income rose to $1 billion or an equivalent of 60 cents per share down from $846 million or 49 cents a share last year.
The net income increase can be attributed to global revenue growth, a lower tax rate and reduced selling and administrative costs, according to Nike. The general, administrative and selling expenses fell by 4 percent to $2.7 billion
Total revenues rallied to $8.68 billion or 5.3 percent while sales rose to $8.1 billion, an equivalent of 7 percent growth driven by double digit growth in Greater China, Western Europe and emerging markets.
Nike saw growth in its Converse brand coming in at $554 million as well as impressive growth for its Jordan brand.
In the latest quarter, Nike’s gross margin fell 180 basis points down to 44.1 percent with higher selling prices being offset by negative changes in forex rates and higher costs of products.
In the last quarter, Nike experienced mixed results such that revenue did not meet expectations but profits far outpaced predictions from Wall Street.