Nike Inc Spends Heavily on Ads Amid Growing Online Sales
Nike Inc is known for its lavish spending on advertisements.
The manufacturer’s ads remained constantly well-received in the market, garnering millions of reactions and shares across all digital platforms.
In a data showing advertisement spending, Nike Inc recorded a total of $37.4 billion exhausted for its ads in the last five years.
For 2020, the firm spent $3.59 billion on ads, a slight drop from the previous year’s $3.75 billion.
As its chief executive asserted, Nike Inc recognized the shifting consumer behavior in the COVID-stricken market. The disruption offered the shoe manufacturer an opportunity to transform its business in a way that it could cater to changing customer needs.
Due to this, the firm currently invests heavily in digitization, including making its online stores attractive for customers.
Now that more people are inclined to do their shopping online, its constant appearance on varied digital platforms is imperative to maintain its position in the market.
Along with the growing online market, Nike outlet stores in the United States dropped from 384 to 338 in the year. Other brick-and-mortar stores on overseas locations also dropped from768 to 758.
Better Than Expected Earnings
In the latest earnings report released by Nike Inc, online sales surged by 82% for the quarter ending August 31.
It recorded a fiscal net income of $1.52 billion, translating to $0.95 earnings per share. This is higher than last year’s figures standing at $0.86 per share.
Analysts predicted a $0.47 per share earnings from a $9.13 billion revenue. The company exceeds expectations after it reported a strong $10.59 billion earnings.
After the announcement, the firm’s shares instantaneously jumped 8%, following a 3.1% rise in the regular session.
For the record, Nike Inc shares are up by 15% for the year. This is in contrast to a 4% decline recorded by the DJIA, in which the shoe manufacturer is a component.
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