Nike (NKE) is Benefitting From Reopening
- Nike DTC: +20% YoY and the company booked $1 billion in online sales in North America for the first time. Digital sales are expected to account for 50% of total revenue in the coming years.
- Lululemon DTC: +55% YoY, accounting for nearly 45% of total revenue.
Now, we’re watching Nike beginning to gain steam as society reopens:
- Nike is benefitting as consumers buy fashionable footwear to wear to social events. We know consumers are seeking to upgrade their wardrobes: mentions have increased +28% YoY. The interesting caveat here is that Nike actually has a “fashionable” application, with many consumers buying sneakers to complement their trendy outfits. Lulu doesn’t have this application.
- Lululemon has an extremely loyal consumer base, driven by perceived high-quality products. LULU sentiment is ~15 points higher vs. NKE.
- Nike is maintaining its digital momentum. Nike DTC mentions are more than 100% higher vs. 2019 while Lululemon is showing signs of normalization. Lululemon DTC mentions are higher vs. 2019, but only by around ~10%.
Some of this discrepancy in digital is likely due to the nature of each brand:
- Nike leans heavier on footwear. In 2020, footwear accounted for 66% of Nike’s total revenue. This footwear is often released in exclusive “drops” on its SNKRS app. This drives engagement and creates a unique opportunity for consumers to brag if they snagged (or didn’t snag) a coveted shoe.