If you're a sports fan, you're probably used to seeing the Nike (NKE 0.11%) logo on the clothing of your favorite athletes. But Nike also has become a household name for the rest of us who like sports or fashion and comfortable clothing and shoes.
Nike shares have awarded investors over time. The stock has climbed more than 300% over the past decade. But Nike's earnings and share price gains aren't over. The following two charts help explain why this sportwear giant could win over the long term.
Image source: Getty Images.
A good track record
I like a company with a good earnings track record. And the first chart shows Nike has that. The company has increased worldwide revenue every year since 2011, with the exception of 2020. That's understandable -- and the case for most retailers -- due to the coronavirus pandemic. The health crisis temporarily closed stores. And shoppers focused on buying essentials.
This chart shows Nike's global revenue recovered from that early pandemic dip. It topped $44 billion last year. So, the company more than doubled revenue over a 10-year period. This performance over time -- and recovery last year -- shows Nike has the ability to adapt to the market and maintain the strength of its brand.
Now, let's move on to the second chart. This one shows total revenue of the global sports apparel market last year -- and forecasts from this year through 2028. According to the chart, revenue is set to steadily climb. In fact, it's expected to reach more than $267 billion in 2028. That represents a 32% increase from today's level.
Strength in innovation
This is great news for Nike. The company is a leader in the market and is focusing on growth in apparel. One of Nike's strengths is in innovation and the company promised to continue "innovating in apparel" in its latest earnings call. For example, Nike designed a hockey jersey using 4D body mapping technology. Nike's connection with fans through its apps is another plus. It's already completed successful product drops through streaming events for its sneakers. The company said it's looking at the possibility of live streaming events for apparel and other products. All of this means Nike clearly could benefit from overall growth in the sports apparel market.
So, what does this mean for investors? Nike is a stock you'll want to buy and hold for the long term. The shares probably won't gain overnight. But Nike's earnings prospects look positive. These potentially strong earnings are likely to push the stock higher over time as they did in the past. And this could be a major victory for Nike and its investors down the road.
