Buy #$NKE Stock Near Highs and Hold It for Long-Term Growth? -
Nike (NYSE:NKE) NKE is one of the first of a few big names set to report what we at Zacks consider to be part of the larger third quarter earnings season, with such results already out from FedEx FDX, Adobe ADBE, and a few others. So, let’s see if investors should consider buying the sportswear giant, with its Q1 fiscal 2021 financial results due out on Tuesday, September 22.
Long before the coronavirus was even a minor concern, Nike was benefiting from its transition to a higher-margin direct-to-consumer model. Last year, Nike executives projected that the firm’s digital unit will account for up 30% of Nike’s total business by 2023, compared to roughly 15% at the time.
Nike’s digital and DTC drive came as it watched malls and department stores fade in the Amazon AMZN age, and newcomers like Lululemon LULU become rivals via a mostly DTC model, driven by digital marketing and stand-alone brick-and-mortar shops.
The sportswear giant has rolled out multiple apps in recent years and expanded its social media reach, as people shop directly on Instagram FB and elsewhere. Nike has also digitalized its supply chain to increase efficiency.
On top of that, it has continued to invest and modernize its own stores in high-value cities of cultural influence. Nike has also maintained strategic relationships with the likes of Foot Locker (NYSE:FL) FL and the key players within the booming online sneaker market.
Despite the success of Lululemon and the resurgence of Adidas (OTC:ADDYY) ADDYY in North America, Nike remains a titan of global and regional sports. More importantly, it has expanded its influence over culture and fashion, as its sneakers are more sought after than ever and streetwear hits the runways.