Sportswear brand Nike has revealed its net profit increased to US$4 billion during the 2019 financial year, compared to the previous year, which saw Nike earn US$1.9 billion.
The large disparity is attributed to the enactment of the Tax Act last year, which raised Nike’s effective tax rate to 55.3 percent – causing a 54 percent drop in profits. In FY19, Nike’s tax rate returned to a more normalized level of 16.1 percent.
The positive results come at a turbulent time for the sportswear giant, which recently faced a social media backlash in China after Undercover, a Japanese streetwear label it collaborated with on a line of sneakers, shared an Instagram Story with the caption, “No Extradition to China,” and “Go Hong Kong”.
Nike subsequently pulled the sneakers from its offering in China, according to media reports.
Nike president, chairman, and chief executive Mark Parker told investors the business is committed to the China market “for decades to come”.
“We are and remain a brand of China and for China,” Parker told analysts, according to the Financial Times.
“We’re confident that we’ll continue to grow sport and our business in China for decades to come.”
On Thursday, Parker told investors FY19 was a pivotal year for the retailer.
“Our distinctive innovation and digital advantage led to accelerated growth across our complete portfolio, while our brand fuelled deeper relationships with consumers around the globe,” he said in a statement.
Revenue grew 7 per cent to US$39.1 billion, driven by sportswear, Jordan, and running, as well as strategic investments in innovation and digital led by Nike Direct.
The Converse brand saw revenue grow 3 per cent to US$1.9 billion, which was mainly driven by double-digit growth in Asia and digital.
Nike and Retail Prodigy Group have been contacted for comment.