Nike Incorporation is a company based in the United States. The company designs, manufactures, and sells clothing and other apparel products around the world. The company sells shoes, shorts, shirts, sports merchandise, and several other products for consumers. The company was founded in 1964.
Why You Should?
- Nike is a great reopening play in an investor’s portfolio. The company continues to see strong demand for its products as consumers go back outdoors once again. Events like back-to-school shopping have also benefited their recent quarterly results. This reopening will benefit the company and its investors.
- The COVID-19 pandemic also boosted the sales for many of the company’s products. This is because as people stayed at home, they looked for comfortable clothes to exercise and work in. Nike was a great option for this as they offered a strong product lineup of comfortable clothes, something that was highly demanded by consumers
- Nike has invested heavily in selling its products directly to consumers through its stores and online platform instead of other resellers like Foot Locker and Macy’s. These efforts have been bountiful as the company now reports that 40% of its sales are now coming through this DTC channel, something that has boosted the company’s profitability and growth.
- Nike is one of the most popular brands in the world, with its iconic swoosh logo easily recognizable across many countries. The company is known for its iconic sports merchandise (the Jordan shoe brand). Other Nike products are known for their high quality and unique look. This strong brand recognition has helped the company grow and will also benefit investors.
- The company usually reports its best numbers during the holiday season as consumers around the world purchase Nike products to use or give away as gifts to their friends and family. This upcoming holiday season is expected to be a record-breaking one for the company, something that will benefit the company’s results and investors.
Why You Should Not?
- The company faces tough competition in the clothing and apparel industry. Some of these competitors include Lululemon, Under Armour, and many others. This competition might hurt the company and its investors in the future.
- The company faces several supply chain issues. For example, the company’s factories in Indonesia and Vietnam were shut down due to COVID-19, something that could cause the company to lose over 160 million shoes of production. Higher raw material costs and shipping costs, as well as other labor shortages, have also hurt the company and its investors.
I think that Nike is a great long-term investment due to its position as a good reopening play, positive impacts from the pandemic, strong direct-to-consumer sales, strong brand recognition, as well as a possibly record-breaking holiday season. However, tough competition and supply chain issues might hurt the company and its investors in the future.