Will Nike be able to safeguard its market share from the potential

competitor in the long-run?

The key revenue sources for Nike (NKE) are apparel and footwear brands and
contribute 80 percent to Nikes revenues. Nike revenues grew 15 percent to 7.98
billion for Q1-FY15, footwear and apparel both contributed $6.93 and collectively
mirrored 29 percent year-over-growth. The company reported diluted earnings per
share $1.09 multiple growths over the previous quarter and in comparison to the
identical period of last fiscal year.

Source: Reuters.com
The sports apparel manufacturer announced $0.28 quarterly dividend for both class
A and B shares reflecting 17 percent increase. Nikes chief executive promoted
companys consistent increase in dividends to shareholders over a decade. The
dividend is due to be paid in beginning of January and recorded for the close of
business for the current quarter.
Apparel industry: outlook
According to statistics, global apparel industry will grow currently from $152 billion
to $171 billion till 2017. Although Nike seize maximum market share for apparel
business that increased 86 base points in two years time but induction of new
players can expose companys suitability in the near future.

Source: Statista.com
Can Nike crush the ambitious Under Armour growth prospects?
Fashion trends have significantly transformed from leisure to athleisure; now women
prefer sweatpants over denim and guys favor hoodies and sneakers rather being
formal.
In the advent of increasing demand for low-performance athletic wear, Nike faces
stiff competition from small players in the footwear and apparel market. Under
Armour (UA) now considered as Nike potential competitor in the near future after
documenting consistent growth in revenues and operating incomes. Under Armour
chief executive, Plank growing confidence in the footwear business in reference to
50 percent year-over-year revenue growth. The WILL WHAT I WANT marketing
campaign targeted to motivate females overcoming barriers and accomplish their
respective dreams.
Plank is enthusiastic about gaining success by leveraging partnership amongst
female athletes success stories and companys brand name. Direct-to-customer
retail network and e-commerce optimization can lead to further increase in Under
Armours revenue growth reason being increased web traffic and significantly 70
percent new customers.
In response, Nikes marketing gimmick placing top ranked female athletes on a
showcase reflecting tone bodies to reveal its 2015 women collection was successful.
Nike capitalized on 27 athlete models catwalk and opened a store exclusively for
women in an attempt to embrace and seize female athletic wear demand.The 6000
square-foot retail store in Newport Beach offers dedicated services for make room
for inspiring women community alongside array of company products.

Nike expanded its global retail network at a rate of 4.10 percent over last six years
in addition to women-only stores to seize high margins in footwear and apparel
business. An opening of new women-only store in China at the end of November can
be one more leap en route to realizing women revenue 40 percent of total in few
years. Currently, Nike documents $18 out of $100 revenue under women apparel
segment cumulating $5 billion over a year.

Source: Statista.com

An insight to female sportswear market trends

SBRnet reports that irrespective of outdoor games, fitness activities and any sports,
female participation is growing in numbers over years. The 2013-14 trends have
continued to make its mark along with integration of leisure and fashion in
sportswear. Increased female disposable income and perceived fashion and style
along performance wear signified high growth in female sportswear business.
Female inclination and appetite for fashion sportswear pushed brands like Nike and
Under Armour to innovate their respective products on the lines of comfort and
style. Not only increased participation but also female fan following towards national
sports in U.S contributes to growth.
Financial performance: markets emerging brand against established
brand
The growth in industry infants revenue over last decade is exceptional even in
presence of established brands like Nike and Adidas that carry a large pool of loyal
customers. Under Armour recently toppled German based Adidas from second
biggest sports apparel and footwear brand. According to market researchers, Under
Armour has been successful in making a dent in its peers market share since its IPO
in 2005.

Source: Yahoo finance

Stock performance reflects investor confidence in Under Armour since beginning of
the year resulting 58 percent increase in stock price in comparison to 23 percent
increase in Nikes stock price.

Source: Yahoo finance

Potential lawsuit may impact constrained growth
Nike rolls over companys plan for sneakers that subtly tribute Allen Iverson and
expected to be released in succeeding months. Allen Iverson raised questions on
the legitimacy of Nike product as he endorses Reebok from many years. Nike
spokesperson issued a brief statement about companys decision to pull back on
shoes version in response of objection by NBA superstar. Allens attorney stipulated
bad business ethics in his letter to companys management reason being no
contractual agreement with his client. In past many similar disputes developed
among athletes and organizations over use of names in different scenarios. It is
easier said than challenging Nikes intentions to leverage Iverson legacy to realize
profits.
Final takeaway