![]() ![]() ![]() The past couple of years have been unique in that supply chain issues have caused problems for apparel businesses. In the latest fiscal quarter, the business returned $1.7 billion to shareholders. The net income margin has averaged 10.2% in the last five years, which investors should appreciate because it reduces the risk of running into financial trouble.Īdditionally, Nike consistently generates lots of free cash flow, allowing the leadership team to pay a dividend and buy back stock. Not only does this help to increase accessibility and convenience for consumers, but it also provides valuable data and insights for the business to utilize in marketing and product decisions.īecause Nike is at a more mature stage in its lifecycle, and the business model and long been proven out, the company is sustainably profitable. Nike's digital apps have been incredibly popular, now amassing hundreds of millions of members. In fact, a few years ago, CFO Matt Friend said the goal was to one day generate half of all sales from the digital channel. As part of a strategic shift that has been years in the making, the business is focused on innovation, speed to market, and growing the direct-to-consumer business. Nike's executives have done a wonderful job bolstering the company's digital foundation. This is also exemplified in the company's gross margin, which has averaged 44.8% in the last decade. This has been developed over the decades thanks to Nike's marketing prowess and athlete endorsements, which associate the brand with a winning mentality.Īccording to Interbrand, Nike's brand is an asset worth $54 billion, making it the ninth-most valuable in the world. And the key to the company's economic moat is its powerful brand. ![]() There's no denying that Nike has long operated from a position of competitive strength. But before investing in this top apparel and footwear stock, it's best to understand the bull and bear cases as we look at 2024. ![]()
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