NBA Deal and Olympics Will Help Nike Just Do It in 2012

by Lauren Todd
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Nike Brand Footwear, driving nearly 50% of Nike’s (NYSE:NKE) stock, experienced an increase in consumer satisfaction in the third quarter – a perfect lead-in to what will likely be a very strong year for Nike in 2012.  For just the second time in history, Nike earned over an 80 on the consumer satisfaction score, in the process tying Adidas (PINK:ADDYY) in consumer satisfaction ratings.  Consumers perceive Nike shoes to be higher in quality than competitors, though more expensive. [1] During the economic downturn, Nike has benefited from staying aggressive in marketing and retail efforts. The company pushes to continue to improve its margins via streamlining factories and supply chains.  Nike has been able to avoid customers moving to other brands during the tough economic times; Nike features premium and value product lines, allowing consumers to move between Nike product lines (rather than to another brand) during tough economic times. [2]

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NBA Season Saved, Big 2012 Ahead

With the NBA season looking like it will see a Christmas start, 2012 will be likely a great year for the sports giant. Not only will Nike benefit from exposure at the Olympics, but Nike will also be front and center during the NCAA March Madness and BCS bowl season.

Nike has also redesigned uniforms and gear for the 2012-2013 NFL season and the gear has had great initial reviews.  Historically Olympic years have been very strong years for sports apparel companies, and we expect that 2012 will be no different.

The current Trefis price estimate for Nike of $85 is slightly behind the current market price.

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Notes:
  1. Nike ties the score with Adidas in Consumer Satisfaction Rating, BizJournal []
  2. Buy Nike for Strength, Growth, And the Olympics, Seeking Alpha []
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