Nike Inc (NKE), Under Armour Inc (UA): This Athletic Giant Is Poised for a Bright Future

CEO Mark Parker stressed during the fourth-quarter earnings call that China and North America are Nike’s “two big market stories,” and the company is focused on creating long-term sustainable and profitable growth in China.

Growth opportunities

Nike is continuously improving its products, which play a key role in its growth. To sustain its growth, Nike is expanding into trendy/fashion industries targeting the general population. Rising fitness consciousness and income levels in developing countries, as well as the trend towards stylish and comfortable sportswear, will add to its growth.

Nike can produce high-quality product at the lowest possible price. The next five-year plan may involve a shift in the focus from the traditional categories like footwear, equipment, etc. to individual sports and sales of other items like sunglasses, hats, and other accessories. This athletic giant may attain six-sigma quality standards by incorporating RFID technology into its supply chain system.

On a concluding note

Nike has a high perceived value, and is a hit among consumers who are brand conscious. It is distinctively marked by its slogan “Just Do It.” There is also an opportunity to tap other market segments, like Asian countries where disposable incomes are increasing.

The company will be a profitable investment since there is an ever-increasing demand for products in the sports sector. The acquisition of the brand Converse has also proved beneficial. The addition is raking in annual revenue that is four times the purchase price.

Nike is expected to create value for its shareholders. It remains solid on the revenue and earnings front while North America remains its strong point. Greater China and other emerging markets will be key for Nike to gain market share in the future as these regions are growing faster compared to the developed markets. The balance of its fundamentals and forward outlook makes it an attractive component in any investment portfolio.

The article This Athletic Giant Is Poised for a Bright Future originally appeared on Fool.com is written by Abir Karmakar.

Abir Karmakar has no position in any stocks mentioned. The Motley Fool recommends Nike and Under Armour. The Motley Fool owns shares of Nike and Under Armour. Abir is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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