Oct. 9 (Bloomberg) -- Nike Inc., the world’s largest sporting-goods maker, said annual sales will rise to $36 billion by the end of fiscal 2017, lead by its apparel unit.
The company also said it will have $30 billion in annual revenue by the end of its fiscal year 2015, hitting the high end of its own previous forecast for revenue of $28 billion to $30 billion by then.
“For Nike, no market is yet fully developed,” Chief Executive Officer Mark Parker said in a presentation to analysts. “Nike is a growth company, and our results over the past 10 years have proven this true.”
The company, based in Beaverton, Oregon, has seen its results anchored by growth in North America, its largest market, and buoyed by sales of basketball and running gear. That’s helped it overcome revenue declines in China and mixed results in Europe.
Revenue from apparel will grow to $10 billion in 2017 from $7.5 billion in fiscal 2013, the company said in a statement. Women’s products are seen rising to $7 billion by 2017 from $4 billion and Nike’s Converse line is forecast to almost double to $3 billion in annual sales, the company said, from $1.45 billion in fiscal 2013.
Nike rose 0.9 percent to $70.89 at the close in New York. The shares have gained 37 percent this year, compared with a 16 percent gain for the Standard & Poor’s 500 Index.
Nike’s sales forecast equates to a compound annual sales growth rate of 9.2 percent over the next four years. The annual sales growth rate was 10 percent in the past three years. In the past four quarters through Aug. 31, sales gained 7.1 percent to $25.8 billion while net income rose 26 percent to $2.7 billion.
The company’s profit has been boosted by its ability to raise prices while maintaining sales growth. Nike’s gross margin, the percentage of sales left after subtracting the cost of goods sold, widened to 44.9 percent in its fiscal first quarter from 43.7 percent. The increase was the third straight after eight consecutive declines caused mostly by rising labor costs in Asia.
Analysts had forecast Nike revenue would grow to $29.8 billion in the fiscal year that ends in May 2015, even after it sold its Cole Haan and Umbro units.
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