Nike’s Renewed Focus on Its Competitive Advantages Should Eventually Allow for a Comeback

We view Nike as the leader of the athletic apparel market and believe it will recover from its recent problems, such as a lack of product innovation, soft demand for sportswear, and strained relationships with wholesale accounts. Our wide moat rating is based on its intangible brand asset, as we believe it will maintain premium pricing and generate economic profits for at least 20 years. Nike is the largest athletic footwear brand in all major categories and in most markets. While it does face significant competition, we believe it has proven over a long period that it can maintain share and pricing.