Nike (NKE 0.39%) is among the most iconic brands in the world. The ubiquitous swoosh is regarded as the most valuable apparel brand globally with a price tag of $34.8 billion, according to a 2020 study by Brand Finance. The organization's broad reach has powered the stock to total returns of 72,790% since its public debut in 1980.

Long-term investors, however, don't care about where a company has been nearly as much as where they think it will be in the years to come. Here we will gauge Nike's long-term prospects for shareholders, and if it can continue yielding historically impressive returns.

Nike headquarters

Image source: Nike.

How Nike is set up for today and the future

Nike conducts roughly two-thirds of its business via brick-and-mortar retail operations, and the shutdowns related to COVID-19 have been a difficult obstacle to overcome. Considering this, the durability of Nike's financials in its most recent earnings report (June–August 2020) a few weeks ago was admirable.

Despite many of Nike's distributors (and its own stores) operating in limited capacity or being shut down entirely, revenue for the company fell just 1% during the quarter. This is largely thanks to digital sales growing 82% year over year. Nike reported nearly 200% growth in demand for its Nike commerce app and triple-digit growth in monthly active users. Nike's apparent outperformance in remotely conducted transactions is quite timely while social distancing persists.

More importantly for the longer term, the direct-to-consumer (DTC) nature of these sales will have a positive impact on Nike's margins and profitability. Why? Nike fetches a lower average sales price when selling to wholesalers than it does when selling DTC. These wholesalers also need to profit off of Nike apparel and an additional profit-sharing party diminishes Nike's margins. This means each dollar in DTC revenue is more valuable to the company's bottom line.

While the pandemic has undeniably been a tough pill to swallow for the clothing industry, perhaps COVID-19 forcing Nike to accelerate its digital evolution will actually be a boost to its long-term profits. The company has clearly proven itself capable of leveraging a truly iconic brand to shift demand to channels that can continue operating regardless of external obstacles.

Nike's leadership deserves a lot of the credit for making that happen.

New, digitally focused leadership

Last year, John Donahoe succeeded Mark Parker as Nike's CEO. The new CEO's goal is to accelerate Nike's shift to online sales. His prior experience as the CEO of eBay, the chairman of PayPal Holdings, and most recently the CEO of cloud-computing powerhouse ServiceNow is ideal for accomplishing just that.

Digital sales for Nike have been aided by COVID-19, but will most likely continue to be a vital part of its business plan for the long term -- management knows that. Based on global e-commerce growth expectations of 32.4% through 2024, the opportunities in selling online are immense. Donahoe is the perfect person to develop this opportunity and to continue delivering for Nike shareholders.

While Nike's omnipresent brand is capable of yielding demand anywhere, the company's digital push is what will provide the compelling stock upside for years to come. For these reasons, regardless of past outperformance, Nike could very well be a millionaire-maker stock today.