Controversy Is Profitable For Nike

Nike caused an uproar earlier this month with its ad featuring former NFL quarterback Colin Kaepernick that debuted just as the football season was about to begin. But the shoe maker’s stock is up and sales have been steady.

The furor seems to have largely died down and the company reported an earnings beat on Tuesday.

While purpose-driven marketing can be a land mine for some companies, others like Nike have found it a useful way to appeal to their core demographic and differentiate themselves in an increasingly polarized political landscape.

“I don’t think it was a big gamble. Historically, Nike has always done this so it was no shock,” said Antonio S. Williams, who teaches sports marketing at Indiana University. “They’re the king of emotional marketing so everything they do, they do it with emotion.”

For the quarter ended Aug. 31, Nike’s net income rose 15 percent to $1.09 billion, or 67 cents per share, from $950 million, or 57 cents per share in the prior-year quarter. Analysts expected 63 cents per share. Revenue rose 10 percent to $9.95 billion, edging past analyst expectations of $9.93 billion, according to FactSet.

The results don’t have anything to do with the Kaepernick ad, which came out shortly after the quarter ended. Instead, the quarter benefited from the FIFA World Cup of soccer that showcased many players and teams wearing its clothing and shoes, as well as the “athleisure” trend that continues to be strong.

But Nike has long boosted its global brand with edgy visual ads. On Monday, it celebrated another controversial athlete, Tiger Woods, who Nike stuck by during a 2009 sex scandal. Its latest campaign, a two-image Instagram ad celebrating Woods’s first PGA Tour win in five years, went viral. The first image shows his back, with the words, “He’s done.” But a swipe through to the second image shows the front of him giving a fist pump and the words “it again.”

The Kaepernick campaign included a print ad that featured a close-up of his face and the words, “Believe in something. Even if it means sacrificing everything,” as well as a TV ad that featured many Nike athletes and a voiceover by Kaepernick in celebration of the 30th anniversary of Nike’s “Just Do It” tagline. Kaepernick was the first NFL athlete to take a knee during the national anthem to protest police brutality.