Nike continues to ‘set the pace’ as the company provides outlook through FY2025

After torching Wall Street Q4 estimates with healthy beats on revenue, adjusted EPS, gross margin, and North American sales, sportswear giant Nike (NKE) is looking beyond full-year guidance by providing an outlook through FY2025.

“Nike sets the pace through a continuous flow of new innovation, the world’s greatest roster of athletes and compelling experiences for consumers that create lifelong relationships with our brand. Our strengths and proven playbook give us the confidence to move even faster to invest at an even more accelerated pace against the opportunities we see ahead,” Nike CEO John Donahoe said during the Q4 earnings call.

“As we emerge from the pandemic, accelerate our consumer direct strategy and transform the operating model of the company. First of all, Nike is a growth company, and we expect to sustain strong revenue growth going forward, he added.”

Digital is a big reason why the Swoosh brand is able to provide guidance into 2025 confidently. Nike Direct Q4 sales increased 73% to $4.5 billion, and Nike Digital sales are up 147% from Q4 2019. Donahoe says that the company continues to see digital as its leading channel for growth in FY ’22, with the combination of owned and digital partner sales accounting for almost 35% of the company’s total business, which is three years ahead of schedule.

Matt Friend, EVP & Chief Financial Officer at Nike, noted that the Swoosh brand expects Nike Direct to represent approximately 60% of the business in fiscal ’25. 

PARIS, FRANCE - JUNE 24: A model, detail, walks the runway during the Louis Vuitton Menswear Spring Summer 2022 show as part of Paris Fashion Week on June 24, 2021 in Paris, France. (Photo by Dominique Charriau/WireImage)

PARIS, FRANCE – JUNE 24: A model, detail, walks the runway during the Louis Vuitton Menswear Spring Summer 2022 show as part of Paris Fashion Week on June 24, 2021 in Paris, France. (Photo by Dominique Charriau/WireImage)

The confident outlook of the sportswear giant has led to analysts raising their price targets.

“The huge 4Q21 beat, better than expected FY22 guidance, and a healthy growth plan through FY25 highlights Nike’s digital prowess, best-in-class customer engagement, enhanced by increasing use of data, and unrivaled product innovation continues to accelerate overall despite politically induced transient tensions in China, and near term supply chain constraints,” said Sam Poser, analyst at Williams Trading, in a recent note.

“Through the ‘Consumer Direct Offense,’ the Nike, Jordan and Converse brands will continue to strengthen, margins will continue to expand, NKE will continue take share and separate itself from its competition, and more undifferentiated retailers are at risk of losing the NKE’s Brands,” he wrote.

Williams trading has since raised it’s FY22 & FY23 EPS estimates from $4.20 & $4.87 to $4.54 & $5.30, and raised its Price Target from $189 to $196. Cowen Equity has also raised its price target of the Swoosh brand to $181, up from $145.

Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.

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