Strengths
Product Innovation: NIKE has a long tradition of staying ahead of the technology curve, which has helped it attract loyal followers and influential endorsements from elite professional athletes, from Michael Jordan to Tiger Woods. It’s not resting on its laurels either, most recently rolling out NIKE FLYKNIT, an innovative footwear platform that uses yarns and fabrics to create a featherweight, formfitting, virtually seamless upper. This augurs well for market-share momentum going forward, especially in the running and basketball shoe categories, where the company is looking to up its exposure. And the commitment to innovation should allow the company to maintain its pricing power in the years ahead, offsetting any commodity-related margin pressures. We expect the FLYKNIT line, meanwhile, to enable NIKE to capitalize on the growing trend toward minimalist footwear. This is a long-term secular trend, in our view, and it should continue to play out through decade’s end.