One of Nike’s (NKE) surprise victories this spring was increased interest interest in the brand sparked by the ESPN documentary “The Last Dance,” about Michael Jordan and the Chicago Bulls 1997-1998 championship season, according to a recent note by Cowen Equity Research.
While the documentary mainly focused on the players, the film added “incremental interest in vintage Jordan styles, particularly the Jordan V,” according to Cowen. The shoe, the last sneaker Jordan wore before becoming an NBA champ, was re-released during the 10-episode series and sold out within minutes.
Cowen Equity Research remains bullish on the sportswear giant. At the beginning of June, the firm raised its price target to $110 up from $85. The upgrade comes off the company’s increasing digital prowess and its ability to weather the COVID-19 pandemic while also advocating for social justice.
“You can’t hold them down,” says Cowen analyst John Kernan referring to the swoosh brand.
“The SNKRS app has been a big hit. They’ve been amplifying a lot of their product launches on that platform. They’re acquiring new customers, and they’re probably learning a lot from the data they’re gaining that app.”
“When you’re talking about Nike, you’re talking about a $40 billion top line, but the eCommerce platform is a lot smaller than that. It’s still a mid 18% of overall revenue. So there are a lot of investments to make, and why you saw us raise the price target was the unit economics,” Kernan says.
“Selling a Jordan or an Airmax shoe on Nike.com versus selling it to Foot Locker (FL), the unit economics are a lot better on Nike’s own digital platform because they capture a higher profit.”
When asked about how Nike created and cultivated the Jordan brand, Kernan analyst referred back to “The Last Dance” documentary, specifically the part when Nike rival Adidas (ADDYY) passed up on the chance to sign the man who would become arguably the greatest player in NBA history.
“Adidas blew it … He [Jordan] still would have been the greatest basketball player ever, but the shoe and the style around it and the legacy of it all — Adidas would not have been able to curate that like Nike. The creativity at Nike was really starting to take hold the same time Jordan came up.”
Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.