Off the back of announcing a slight decline in revenue in the quarter by 1%, down to $12.2 billion, the Nike $NKE board has initiated an $18 billion stock repurchase program to take advantage of the stock down 38% from its high back in November 2021.
The stock buy-back should be a good sign for investors, which at current prices represents about 10% of outstanding shares. This is also in addition to the $1.8 billion in dividends that the company has paid out over the past year, which was an increase of 12% higher than in fiscal 2021.
Nike is a compelling company to own given its goal of dominating digital. Its ecosystem now contains more than 300 million members, which John Donahoe, ex-eBay employee, and current Nike CEO says digital will make up at least half of all revenue in the not too distant future.
Its flagship mobile apps, Nike Training Club, SNKRS, and Nike Running Club are clear examples of where Nike is heading in the digital space. And then there is the partnership with Roblox to deliver the NIKELAND as they target the younger generations through a virtual world where you guessed it, you can buy all sorts of Nike gear.
Currently, digital sales for Nike represent 26% of the Nike brand business, so there is still a long way to go, but Nike is clearly a leader in the retail space building a very strong digital presence and giving other retail brands a path to follow.