Nike took pro investors by surprise when it posted its earnings results, but ya know, we never lost faith.
👉 Background: We know Nike is pretty much always on top of their game. They're the #1 most-trusted brand for young consumers and they're doing big things in the Metaverse with Nikeland.
👉 What happened: Nike's recent earnings results showed it performed a lot better than expected in the Q4 of 2021. The company's revenue hit US$12.23 billion, and while that is a little down from a year earlier, it ain't about the customers.
👉 What else: Nike reckons consumer demand is still sky-high thanks to a recent strategy shift. It's selling more merch directly to consumers, and less through wholesale partners.
💡There are two main ways apparel companies get their products to consumers: wholesaling, or direct to consumers (D2C).
💡Wholesaling is where companies like Nike sell products in bulk - and at a discount - to retailers, who then market and sell them to consumers. It means manufacturers can move a tonne of products at once and on a predictable schedule. However, margins tend to be lower.
💡D2C requires a company to create its own distribution model and consumer relationships. It’s a lil less predictable, but the margins are much higher, especially for strong brands like Nike.
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