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· Posted on
February 21, 2024

Nike just surprised investors with its latest results but let the records show we never lost faith

Nike took pro investors by surprise when it posted its earnings results, but ya know, we never lost faith.

What's the key learning?

  • Nike's revenue beat analysts' expectations, hitting US$12.23 billion in the fourth quarter of 2021
  • Nike is selling more merch directly to consumers (D2C) and less through wholesale partners
  • D2C requires a company to create its own distribution model and consumer relationships.

👉 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.

What's the key learning?

💡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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