Nike made a couple big announcements yesterday. The first, as we saw here, was its resignation from the board of the US Chamber of Commerce. The second, and slightly overshadowed, was a higher than expected earnings report, which caused shares to shoot up in Wednesday trading.
The timing of the announcements could have very easily been a coincidence. A company as large as Nike, with so many wheels turning, it’s very possible that the two developments occurred mutually exclusive from each other. But what if they didn’t?
While most other footwear brands have lost market share in the down economy, Nike has managed to increase its own. Aided by cost reductions and firmer pricing, the world’s largest athletic shoe maker posted a first quarter net income of $513 million, which helped push its highest trading gain since March, according to an article on Bloomberg.
“With the first sign of sales stabilization this quarter, we expect [Nike] investors’ perspective to shift from downside risks to upside opportunities,” Goldman analysts wrote in a recent report.
In an economic climate where brand image can sometimes weigh almost as heavily as balance sheets for a company’s success, it would only make sense for Nike to be extremely conscious of how the company is perceived, especially by its investors. Yesterday’s New York Times break of the news reported pressure Nike received from several institutional shareholders, including a letter of concern issued by Green Century Funds. In it, the capital management company both applauded Nike’s achievements in sustainability and CSR and strongly urged it “to withdraw from the chamber.”
Nike’s announcement came on the heels of several prominent energy companies departure from the Chamber. Nike resigned from the board, however, and did not withdraw its membership. As 3P’s Ben Upham questioned, if abandoning the Chamber was this month’s latest eco-trend, what was Nike really trying to accomplish with this announcement? How much has it to do with the perception of where Nike stands rather than where Nike is really standing?
With that said, it’s incredible that a company as large and iconic would take such, as one commentator called it, an activist stance against one of the largest lobbying organizations in Washington. However, the circumstances with which the announcement came can also lead the cautious observer to be a little curious as well…