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Annual Report: Nike

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US
Fri, 30/06/2017 - 14:29
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Since the financial crash, Nike stocks have experienced strong growth, reaching a high point in November 2015 nearly seven times greater than its lowest point in March 2009. Although the share price has fallen back slightly since the turn of last year, dividends have continued to increase. As the chart below illustrates, Nike’s share price has swung between $50 and $60 since June 2016. Over this same timeframe, BrandIndex, which measures consumer opinion of thousands of brands around the world, has registered a consistently high score for the sportswear brand.

At a time when traditional rival Adidas is enjoying improved financial performance under new leadership, Nike has announced job cuts and partnered with Amazon to improve its online sales. In the eyes of US consumers, though, Nike performs better than its chief competitor.

With the exception of how consumers perceive each brand's value, Nike outperforms Adidas across a range of metrics — from quality to satisfaction. On the marketing side, US consumers are also more likely to have recently heard something positive about Nike, as indicated by its stronger Buzz score.

But all this occurs on Nike’s home turf: America. If we look at the two sportswear companies in Adidas’s native Germany, the results are reversed. Indeed, since last summer, trajectories followed by the home and away brands are remarkably similar.

So, what about a tiebreaker on neutral ground in a market where the two brands, along with the sports stars who wear them, are trying to raise their profiles? How about China, where last year Nike and Adidas reported 27% and 28% growth, respectively?

With the exception of Nike’s Index score plummeting — before rapidly recovering — due to an exposé on China’s annual consumer rights TV show, which revealed that the brand had misled consumers into thinking that a particular model of sneakers included airbags, both Nike and Adidas are, again, seemingly inseparable.

Disclaimer: YouGov for Traders and the data contained within this article do not constitute investment advice.

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