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What happens when the largest sports apparel company in the world meets the largest sporting event in the world? Wall Street takes notice.
At least that appears to be what’s happening with Nike (NYSE: NKE) of late. Nike stock has popped 7% in the last month as the start of the World Cup draws near. Soccer’s showcase event kicks off June 12 in Brazil. And Nike will be a bigger presence than ever during the month-long event.
The company has long been the largest brand name in sports. But soccer was one of its few weak spots. Nike didn’t even sell soccer products until 1994, when America hosted its first World Cup. Adidas, Nike’s German-based rival, has been the face of soccer for years. Even the balls at the World Cup are Adidas balls.
Nike is catching up to Adidas fast, though. Adidas’ soccer revenue in 2013 was $2.4 billion. Nike’s wasn’t far behind at $1.9 billion. The two companies now combine to account for 70% of the global soccer market. And that means you’ll be seeing plenty of both over the next six weeks.
Nike is sponsoring 10 national teams, including the U.S., defending champion Spain and Portugal, home to the best player in the world, Cristiano Ronaldo. That’s one more team sponsorship than Adidas.
Nike is also generating plenty of buzz with its “Winner Stays” World Cup commercial featuring Ronaldo, England’s Wayne Rooney and Kobe Bryant.
In most corners of the world and across most sports, Nike needs no introduction. It’s a $66 billion company with a 17% global market share. Soccer is one of the few sports in which the company is still growing.
Those World Cup commercials are tapping into audiences that may only be vaguely aware of Nike. Considering that 3.2 billion people – 46.4% of the world’s population – watched at least a portion of the last World Cup, that’s a lot of new eyeballs.
It seems no coincidence that Nike had its biggest quarter of the fiscal year during the last World Cup. Four years later, Nike’s World Cup presence is even bigger – and so is soccer’s global reach, particularly here in the U.S. That should make for another monster quarter.
And that’s perhaps why Nike stock is getting a nice pre-World Cup bump right now. After all: if there was ever a time to buy shares of the world’s largest sports apparel company, wouldn’t it be ahead of the most-watched and popular sporting event in the world – an event that only takes place once every four years?
The world will be watching soccer for the next month. More than ever before, that means they’ll also be watching Nike.
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