Nike Air or Nike stock: Which one tells us more about the global economy?
Share Now on:
Oregon-based Nike has replaced aluminum giant Alcoa among the thirty big companies that make up the Dow Jones Industrial Average. And today it reports quarterly earnings, expected to be up twenty-four percent year-over-year on worldwide sales for the quarter of about $7 billion.
Nike may only be an athletic apparel company, says business consultant David Howitt at the Meriwether Group in Portland. But it stands in for an important segment of American business.
“You’re not only getting exposure to Nike, you’re getting exposure to Converse and Jack Purcell and Hurley, that are owned by Nike,” says Howitt, “and casual to very sport-specific. So that allows the Dow to sort of represent ‘iconic consumer brand’ at its best.”
Even though Nike is flashy as a global brand, its stock isn’t. It hasn’t soared on hype and consumer buzz the way upstart competitors such as Under Armour and Lululemon Athletica have.
“It’s sports, and it’s being active,” says McGough. “And generally speaking, that’s a part of the consumer spending world that grows two to three points ahead of global GDP.”
Nike’s sales outpace the economy in part because consumers from Boston to Brasilia will spend more than they can really afford on the latest Swoosh-adorned sneaker. It’s about image, identity and aspiration, not just about the shoes.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.