Nike: $27 billion by 2015

Nike: $27 billion by 2015
Mark Parker, CEO of Nike, discusses projected financial figures for 2015 at Nike Investor Day, Wednesday, May 5, 2010, in New York. Parker says the company plans to increase revenue to $27 billion by 2015 by driving growth in international markets and among its array of brands.(AP Photo/Mark Lennihan)

NEW YORK (AP) — Nike Inc. laid out plans Wednesday to hit a personal record as a company — to increase its revenue 40 percent in five years.

The athletic footwear giant said it will drive this growth with heavier emphasis on its array of brands and its presence in international markets, but it also plans to improve its clothing business and add more stores.

"We know there is no finish line, we think there is plenty of growth ahead," Chief Financial Officer Don Blair told investors at a conference in New York.

Nike expects to increase its revenue to $27 billion and cash flow from operations to $12 billion by 2015. Its revenue was $19.3 billion in its most recent fiscal year.

The company also plans to buy back $5 billion worth of its shares in the next five years, and company leaders said they would consider buying the right type of company at any time.

"We will continue to build, fuel and accelerate the Nike Inc. portfolio," Nike CEO Mark Parker said.

One key to growth is reaching new consumers in China, India, Brazil and other countries where the middle class is growing. But the company also plans to rely on its array of other brands, such as Converse, Cole Haan, Hurley and Umbro, to boost revenue.

Most of Nike's revenue comes from its namesake brand, but those other lines broaden its appeal and reach.

For example, Nike expects its Converse brand to double in size in two years. The shoe and clothing brand is growing quickly both overseas and domestically, through sales in venues like J. Crew Group Inc. stores and Target stores that Nike doesn't reach with its swoosh alone.

Nike's other brands also hold large growth potential because they aren't yet as well known abroad as Nike's core brand. And the parent company doesn't yet own rights to some of the brands in some countries. For example, it is assuming control of Converse in China this year and has full control of its Umbro brand only in the United Kingdom.

Nike derives about $2.5 billion from these brands but estimates they generate the wholesale equivalent of $4.2 billion — meaning other companies are benefiting from its brands' strength.

The company plans to invest up to $600 million to bring the number of Nike stores to 750 by 2015, up from about 450 now. Executives said they are improving the shopping experience in their stores and focusing more locations on a single sport or consumer interest.

The company also is trying to improve the popularity of its clothing — which brings in about half the revenue that its footwear does.

"We always believe we are working in an infinite marketplace," Charlie Denson, Nike's brand president said.

Nike leaders said they will continue to emphasize the product innovation and close connection with consumers that are the core of its past success while driving this new focus.

"Our power is quantifiable and our potential continues to grow," Parker said.

Nike shares fell $2.14 cents to close at $75.21.

(Copyright 2010 The Associated Press)