Nike profit grows as furor over Kaepernick ad wanes
NEW YORK Nike caused an uproar earlier this month with its ad featuring former NFL quarterback Colin Kaepernick that debuted just as the football season was about to begin. But the shoe maker’s stock is up and sales have been steady.
The furor seems to have largely died down and the company reported solid earnings on Tuesday.
“I don’t think it was a big gamble. Historically, Nike has always done this so it was no shock,” said Antonio S. Williams, who teaches sports marketing at Indiana University.
“They’re the king of emotional marketing so everything they do, they do it with emotion.”
For the quarter ended Aug. 31, Nike’s net income rose 15 per cent to US$1.09 billion, or 67 cents per share, from US$950 million, or 57 cents per share, in the prior-year quarter. Analysts expected 63 cents per share. Revenue rose 10 per cent to US$9.95 billion, edging past analyst expectations of US$9.93 billion, according to FactSet.
The results don’t have anything to do with the Kaepernick ad, which came out shortly after the quarter ended. Instead, the quarter benefited from the FIFA World Cup of soccer that showcased many players and teams wearing its clothing and shoes, as well as the “athleisure” trend that continues to be strong.
The Kaepernick campaign included a print ad that featured a close-up of his face and the words, “Believe in something. Even if it means sacrificing everything,” as well as a TV ad that featured many Nike athletes and a voice-over by Kaepernick in celebration of the 30th anniversary of Nike’s “Just Do It” tag line. Kaepernick was the first NFL athlete to take a knee during the national anthem to protest police brutality.
People online were divided over the ads. Some burned their Nike socks and threatened boycotts while others saluted the company’s message. Overall, revenue hasn’t been dampened and the boycotts seem to have fizzled out.
This week, in fact, a Rhode Island town council that had approved a nonbinding resolution to boycott Nike products reversed course.
If it fits with the brand, a social stance can work. Outdoor clothing company Patagonia has had success taking a stand on environmental issues because that resonates with its main customers: buyers of high end outdoor clothing gear. And as opposition swelled against the Trump administration policy to separate migrant families, American Airlines and United Airlines, as well as other carriers, issued statements that said they did not want to use their flights to carry migrant children to temporary shelters.
As for Nike, “they hit it out of the park with the Kaepernick ad,” said Bob Phibbs, CEO of New York-based consultancy the Retail Doctor.
“This ad is completely in line with who Nike is and what they stand for. That authenticity resonated and will continue to resonate with their customers.”