Nike Earnings Preview: All Eyes Will Be on Direct-to-Consumer Business
Nike (NYSE: NKE) shares have climbed 34.2% this year, surpassing the S&P 500's 27.5% increase, and as the year comes to a close, investors might wonder if the gains can continue. A big part of the answer will come from what the company has to say about its digital and direct-to-consumer efforts as it reports earnings for the second quarter of the 2020 fiscal year on Thursday.
About two years ago, the maker of athletic apparel and footwear announced a plan to revamp its digital presence and focus on selling directly to the consumer. As part of that ongoing effort, Nike's latest move was to end its two-year relationship with Amazon. Since that announcement about a month ago, the stock has gained more than 7%.
Nike's idea of digital isn't just selling products on an e-commerce site but instead creating a personalized experience for customers. According to a September article in Fast Company, Nike spent about $1 billion as part of the strategy, and NikePlus, its digital loyalty program, now has a subscriber list of 170 million and growing. Members of the program can use the Nike app for everything from reserving a product to finding the perfect shoe size -- a feature scans the foot in a matter of seconds.
Source Fool.com