Nike PT Raised to $150 by Susquehanna On DTC Optimism
Nike price target raised to $150 from $130 by Susquehanna, emphasizing DTC strategy & cost-cutting moves (upcoming layoffs of 7%-10% of workforce.) Direct-to-consumer made up about 33% of Nike’s revenue in FY20, up from 30% in FY19.
Here are recent acquisitions by NKE that have helped its DTC biz:
TraceMe (bought October '19) enhances NKE's social media presence. Launched in 2017 and founded by Russell Wilson. The startup originally built an app to connect celebrities with superfans via behind-the-scenes content. Nike bought the app to supplement content strategy on Nike-owned platforms.
Celect (bought August '19) uses predictive analytics to turn raw data into demand insights, giving NKE a crystal ball into what styles of sneakers and apparel consumers want and when they want it. The technology helps NKE make better-informed inventory decisions.
Invertex (bought April '18) gives NKE 3D body-scanning tech that allows for more accurate sizing, and provides insights for the design of product. Invertex was founded in 2013 and originally created medical equipment.
Zodiac (bought March '18) is a consumer data analytics company that helps forecast lifetime value of individual customers and create tailored experiences.
Nike is also experiencing a significant boost from its SNKRS app, which lets users explore and buy the latest Nike sneakers and gives access to events and new releases. SNKRS has been a driving force for Nike’s digital sales growth. U.S. downloads for the app have increased 160% year-over-year, according to app intelligence firm Apptopia. U.S. footwear accounts for 27% of Nike’s total revenue.
