By CultureBanx Team
- Colin Kaepernick has been on Nike’s endorsement roster since 2011
- Nike shares are up more than 28% year to date
Nike’s (NKE -0.12%) advertising campaign drama marking the 30th anniversary of its "Just Do It" slogan, with black balled former NFL player Colin Kaepernick remains national news, even if investors have put it in their rear view. Is playing the long game going to be fruitful for the company amidst short term stock market pain?
Why This Matters: Among millennial investors the Kaepernick add has paid off. A total of 15,191 investors on Robinhood added Nike to their portfolios this week, up 45% from last week, according to Business Insider. The stock is now the 37th most popular stock on the brokerage platform. Additionally, Nielsen reported 38% of African Americans between the ages of 18 and 34 and 41% of those aged 35 or older said they expect the brands they buy to support social causes.
Let’s look at the big picture, Kaepernick has been on Nike’s endorsement roster since 2011, but has not been featured in one of their ads in two years. This campaign isn’t a major crisis for Nike, as shares of the company are actually up more than 28% year to date, outperforming the Dow’s 5% gain.
The cost to Nike seems very low since the company received more than $43 million worth of media exposure, according to Apex Marketing Group. If we dig deeper into just how well the sportswear brand has performed this year, their North American sales were up 3% to $3.88 billion in its fiscal Q4, after three straight quarters of declines. It’s going to take a lot more to shake investor confidence with continued strong earnings in the region, which accounts for nearly 40% of the company’s revenues.
Situational Awareness: In 2012, Nike replaced Adidas’ (ADDYY -0.21%) Reebok brand as the NFL’s official jersey sponsor, during that time the company’s stock is up more than 230%. At this point it’s highly unlikely the NFL will sever ties with the sportswear giant. This controversy is most likely a blessing in disguise for the league, because Nike is able to take some of the heat off of its handling of the anthem issue, and it may lead to higher TV ratings this season.
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