Nike-Just Do It

Nike is an American multinational corporation that manufactures and retails footwear and apparel. Nike was founded on 25th January, 1964 by Phil Knight and Bill Bowerman out of Oregon ,United States.Originally called Blue Ribbon Sports , they dealt in footwear for professional athletes but slowly diversified into consumer goods in the 1970s and adopted the famous swoosh that is globally recognised today.Following this,Nike went public in 1980 with an initial stock price of 22$.Nike has come a long way since then with 7 stock splits.

Nike currently trades at 167-171$ with a market cap of 270B $.Nike falls under the consumer discretionary sector and shares duopoly in the global shoe market.They have an estimated market share of 68% in their home country USA and 48% worldwide.Nike sold over 780 million pairs of shoes back in 2019 which is by far their best sales year.Nike has just been following market trends and has grown nominally when compared to the capital markets as a whole.

Nike has a stable growth pattern where they are expected to reach 180$ with a high estimate of 213$ and a low estimate of 154$.The median is a 5.93% increase than its last trading price which is a fairly good stock growth.Nike was one of the most affected brands in the pandemic as lesser and lesser people were spending on consumer discretionary and the demand for shoes and apparel hit an all time low.The sales forecast is thereby said to increase 14.6% in FY2022-23 which represents massive influx in revenue.

Nike has seen global dominance both as a producer and retailer and majority of their success is owed to their instant recognisable logo and consumer preferences.The cater to all sections of the society providing quality products at prices that are relatively in the reach of an average consumer.There is a sense of quality and reputation associated with Nike which acts as a Unique Selling Point in most markets.The brand also constantly partners with eminent sportsmen and performers to release limited edition products which see massive involvement from the elite consumers who have the resources to spend on overly-priced limited edition shoes.Nike has created major impact on the shoe industry with associations such as Jordan which is considered to be a lifestyle brand that most associate with luxury and opulence.They are making extensive efforts to reduce their impact on the environment by recycling old shoes, developing new technology that utilises plastic waste from the ocean and launching bio degradable shoes.They have also done something that most brands have failed to achieve which is giving the common man a quality shoe which has led to the ultimate success of the brand.Nike operates on extremely high margins which is already a very good sign from a profit analysis perspective.Although Nike is making consistent efforts to be a socially conscious brand, there have been several controversies surrounding it.There have been multiple cases of human rights violation in Nike plants in south Asian countries and multiple charges of child labour Vietnam for production of Nike apparel.Nike has not played fairly in such situations and has passed on the responsibility of handling such violations to the outsourcing corporations rather than take serious action to remedy the situation.They have also been boycotted in various countries and have seen strikes regarding promotion of political parties.Nike is making considerable changes in the right direction and is now seeking to address all their wrongdoings which is evident from the allocation of the CSR funds to building of schools in Vietnam and Korea.They have been a socially conscious company and have held great reputation worldwide and this is why Nike would be a safe investment when viewed on a long term time horizon.