Nike's annual net profit exceeded 5 billion dollars, making the difference from its competitors such as Adidas, Puma, Skechers, and Under Armor. Nike's revenue from product sales under Michael Jordan's license reached $6.6 billion.
Nike, the world's largest shoe manufacturer, exceeded the $50 billion sales threshold in the last 12-month fiscal year ending on May 31, even when all categories are taken into account, not just in sports. With annual sales of 51 billion 217 million dollars, Nike reached a net profit of 5 billion 70 million dollars. Nike-branded products accounted for $48.8 billion of sales, while $2.4 billion came from Converse-branded products.
$1.1 billion in advertising
With a sales cost of 28.9 billion dollars for the goods it produces, Nike's gross profit margin rate, which is closely followed in the fashion industry, was 43.5%. (This rate is over 50 percent in brands such as Hermes and Gucci)
John Joseph Donahoe II (born April 30, 1960) is an American businessman who is the CEO of Nike. Early in his career he worked for Bain & Company, becoming the firm's president and CEO in 1999. He is on the board of directors at Nike, The Bridgespan Group and is chairman of PayPal. Donahoe was named president and CEO of ServiceNow, a cloud company, in February 2017. He was on the Board of Trustees of Dartmouth College from 2003 to 2012. On January 13, 2020, Donahoe became president and CEO of Nike.
Nike's general administrative expenses were $16 billion 377 million. 1.1 billion dollars of this figure is promotional expenditures such as advertising and sponsorship… While the company kept its EBITDA margin at 32.3 percent, its net profit margin was just under 10 percent.
Looking at the sales breakdown of Nike branded products, the footwear segment accounts for approximately two-thirds of total sales with $33.1 billion. Sportswear products are at the level of 13.9 billion dollars, and equipment sales are at the level of 1.7 billion dollars. Again, in Nike branded products, the men's segment is far ahead with $20.7 billion. The women's segment generated $8.6 billion in sales, while the children's segment generated $5 billion in sales. The sales of Jordan brand products, produced under the license of the legendary basketball player of the NBA, Michael Jordan, reached $ 6.6 billion. Nike has announced that Jordan Brands has become the second-largest footwear brand in the United States, after Nike.
Nike's biggest market is North America with $21.6 billion, with $27.4 billion in wholesale sales and $21.3 billion through its own stores or online channels. Europe, the Middle East, and Africa have a market size of $13.4 billion, China and Hong Kong $7.2 billion, and Asia Pacific & Latin America $6.4 billion.
From the sole produced on the waffle grill, to the Jordan collaboration…
In 1964, University of Oregon track and field Phil Knight and his trainer Bill Bowerman formed a company called Blue Ribbon Sports (BRS). They were the distributor of the Japanese sneakers Onitsuka Tiger. Some of the sales were made with Phil Knight's car. In the first year, they sold 1,300 pairs of shoes and made $8,000. The following year, the turnover had increased to $20,000. In 1966, their first store opened in Santa Monica.
In 1971 Bowerman used his wife's waffle grill on rubber to create a lightweight sole that grips the ground better. In the same year, the contract of BRS with the Japanese company expired. BRS decided to create a new brand called Nike.
In 1976, the whole USA learned about Nike with a campaign with the slogan "There is no finish line". By 1980, Nike owned 50 percent of the US sneaker market. Launched in 1988, the "Just Do It" ads were named one of the top 5 campaigns of the 20th century. Dan Wieden, a partner at the Wieden+Kennedy advertising agency, took his inspiration from the last words of Gary Gilmore, who was shot for a petty crime in 1977: Let's do it!
Passing the 10 billion dollar turnover threshold at the beginning of the 2000s, Nike signed many acquisitions. Cole Haan, Umbro, and Converse to name a few. Over time, the company sold all the brands it bought except Converse.
Jordan's magic hand
Nike made its first sponsorship deal with Romanian tennis player Nastase, among them athletes Carl Lewis, Sebastian Coe, and Allyson Felix; He collaborated with many world stars, including football players Cantona, Ronaldo, Totti, Ronaldinho, Drogba, Henry, Neymar, Mbappe, tennis players Agassi, Federer, Nadal, Sharapova, his famous golfer Tiger Woods.
The deal with the famous NBA star Michael Jordan changed the fate of the company and made Jordan a dollar billionaire. The first agreement with Jordan was signed in 1984. Jordan would wear shoes produced by Nike in matches for 5 years and would receive $2.5 million in return. However, at that time, the NBA wanted 51 percent of the surfaces of the shoes worn by the players to be white, and other colors to match the team. The Air Jordan was red-black. Jordan was fined $5,000 per game. Nike made good use of the penalty debate and put the "Banned" stamp on ads for its Air Jordan shoes. Air Jordan sold 50,000 pairs that year.
Michael Jordan and Nike entered into a comprehensive licensing agreement in 1997. In 2022, sales of 5.1 billion dollars were reached with the Jordan brand. Based on this turnover, it is estimated that Michael Jordan paid between 150 and 250 million dollars in license fees.
Kobe Bryant's Nike line returns
Kobe Bryant's Nike lineup is set to relaunch ahead of Kobe Day on August 24 after the long-term partnership ends in 2021
Legendary basketball player Kobe Bryant's Nike line returns this summer, with the sportswear giant aiming to relaunch it before August 24. The Los Angeles Lakers legend died in a helicopter crash with his 13-year-old daughter Gianna in January 2020. Bryant formed a long-term partnership with Nike, appeared in numerous commercials, and released many signature sneakers during his successful NBA career, which he made his debut in 2003.
The Los Angeles city council has decided that August 24 will henceforth be commemorated as Kobe Bryant Day. Accordingly, events are held for Kobe in the city of Los Angeles on August 24 every year.
"It will be an exciting summer as we set the stage to relaunch the Kobe brand ahead of 08.24 Kobe Day," Nike CEO John Donahue said in a statement, not revealing details about the preparations, the Daily Mail reported. Vanessa Bryant announced on her social media account in April 2021 that her deceased husband's contract with Nike has expired and will not be renewed.