Many people buy Nike sporting goods because they like the quality of the product and the brand. But very few own the shares. In doing so, she could not only have financed her owner's purchases, but also brought in a nice extra income.
Nike reports excellent quarterly figures
The company just released its fourth fiscal quarter results. Nike increased its sales by 96% to $12,344 million. Profit jumped to $1,509 million from a year-ago loss (-$790 million). For the full fiscal year 2020/2021, revenue increased 19% to $44,538 million and profit increased 126% to $5,727 million. It was also the best result in the history of the Group.
Nike benefited from the reopening of many sports shops and from the pent-up demand of many customers. The group also used the crisis to further promote its new Nike Direct strategy. It relies on direct sales to the end customer, individualization, trends and customer needs.
On the other hand, more than 900 stores have been closed around the world during the pandemic. The company's success proves it right. Nike Direct sales rose by 32% in the last financial year, significantly more than that of the group as a whole. Direct selling has also enabled the Group to increase its net profit margin to a record 12.9%.
Nike is highly profitable, with mostly double-digit returns on total assets, and has a strong cash balance of $9,889 million. In contrast, the long-term liabilities to banks are not too high at USD 9,413 million.
The group is represented worldwide and offers the right equipment for many well-known sports. Business with women's clothing, the Jordan brand and the sportswear business are currently doing particularly well.
Due to the change towards a digital company directly connected to the customer, it can be assumed that Nike will continue to grow in the future. In addition, the high profit margin and yield should be maintained.
That's how much investors could earn from the stock
Nike has been one of the largest sporting goods manufacturers in the world alongside Adidas for many years. Both stocks have been very good investments in the past. Nike stock has pretty much only gone up for decades on the back of steadily rising earnings.
Since the beginning of 2000, the total has been 2,044% (06/25/2021). So if you only invested 1,000 euros back then, you now have 21,440 euros and 10,000 euros became 214,400 euros (06/25/2021).
As Warren Buffett put it, "Time is the friend of good deals and the enemy of mediocre companies." So let's focus on high-growth quality stocks with strong brands and great prospects.
The article Nike stock: What if you bought it in 2000? first appeared on The Motley Fool Germany.
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Christof Welzel does not own any of the shares mentioned. The Motley Fool owns shares of shares of and recommends Nike.
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