On Tuesday, CNBC reported that Nike
Coming off a quarter in which the company made $351 million in profits on $3.9 billion in revenues, this contract renewal is a positive signal for Nike shareholders. It sends the message that the company will continue to pay top dollar for the very best athletes in order to maintain its brand image. The relationship between Nike and its peers has grown ultra-competitive in the bid to secure athletes as endorsers. This week, Nike rival Adidas signed Detroit Pistons' guard Chauncey Billups to a lifetime endorsement contract.
There is no question that kids take after their role models in terms of developing a sense of brand loyalty. With Bryant having the top-selling NBA jersey in both the U.S. and China, it is easy to see why Nike wants him to remain a cornerstone of its basketball enterprise. Bryant's present discontent with the Los Angeles Lakers leaves the slight possibility that he could be traded at some point, whereby Nike might be able to pick up some new sales depending on the market in which Bryant lands.
Nike's stock is currently sitting atop its 52-week high, up about 40% from a year ago. The company is set to announce its fourth-quarter earnings later this month. Those earnings will be due in no small part to Kobe and its stable of other athletes. I believe yesterday's signing will play a significant role in Nike maintaining its image as a premier sports retailer for some time to come.
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