Nike on Thursday reported fourth quarter revenue of $10.2 billion, up 4%, as full year revenue grew 7% to $39.1 billion, according to a company press release. The results fell slightly short of analyst expectations on earnings per share, but beat on revenue, according to MarketWatch.
Revenues for the Nike brand were up 10%, reaching $9.7 billion, driven by Nike Direct and wholesale, as well as growth in footwear and apparel. Revenues for Converse were flat year over year, at $491 million.
Net income in the fourth quarter was $989 million, down 13% from the prior year, while net income for the year increased 108% to $4 billion. Gross margin was 45.5%, an increase of 80 basis points, thanks to higher prices and Nike Direct growth. Gross margin for the year increased by 90 basis points.
Nike's fourth quarter capped off a strong year for the brand. While net income was down in the fourth quarter, it was primarily due to higher selling and administrative expenses, which in turn were focused on global brand campaigns and investments in innovation, along with digital capabilities.
Executives remained focused on potential in digital and the women's market, with CEO Mark Parker highlighting 35% digital revenue growth in a conference call with analysts. He also noted that the brand is "well on our way towards cutting our product creation cycle in half," according to a Seeking Alpha transcript of the call.
On the digital side of the business, mobile was a standout, with the company's apps driving membership as well. Nike Plus has now surpassed 170 million members, according to Parker, ahead of the pace Nike expected.
The brand has made a big bet on mobile as a useful way to shop, not just as a conversion tool. So far, that's led to new store concepts based around mobile features, including the members-only Nike Live store and the House of Innovation flagships, as well as the retailer's shoe sizing technology, Nike Fit, which scans a shopper's feet to provide them with the ideal fit in each style of shoe Nike carries.
Executives hope that the latter will reduce returns and give the brand key insight for product development as well.
As for the women's business, executives said it continues to outpace the brand's performance in wholesale, and executives see opportunities in digital for that market as well.
"It's hard to overstate how important this year has been to the evolution of the women's offense at Nike," Parker said. "The business grew double digits in fiscal '19, accelerating in the back half of the year."
Women's growth has been emphasized at the company for some time now, despite questions over the brand's corporate culture and, recently, over its treatment of pregnant athletes, which have cast a shadow over that focus.
Nevertheless, the company has forged ahead with plans for the market segment, including a yoga line announced in January, aimed at both men and women, which directly targeted the athleisure dominance of Lululemon and Athleta. So far, at least, its efforts to win over women seem to be paying off.
"This quarter we claimed the number one position in market share for bras in North America for the first time in Nike's history," Parker said on the call. Apparel on the whole also did well, with sportswear apparel growing over 20%, "into an over $3 billion business."