Powerful Brand Wins Nike a Wide Moat
Innovation and key sponsorships should bolster its leading standing.
Nike (NKE) is the world’s largest athletic footwear, apparel, and equipment player with a focus on performance sporting goods. We view its scale (more than $34 billion in sales), brand intangible asset (the leading authority on performance goods with 50% U.S. market share and 19% in China), and key sponsorships as competitive advantages that will enable the company to maintain its leadership over time.
With high returns on capital that approach those of top luxury brands and our expectation that the company will continue generating excess returns over the next 20 years, we assign Nike a wide economic moat rating.
John Brick, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.