New York - Nike's
CEO said on Tuesday a controversial ad campaign featuring Colin Kaepernick
was connecting with consumers worldwide but shares fell after the
sports giant reported slowing growth in China.
Nike Chief Executive Mark Parker, commenting on an earnings call for
the first time since the Kaepernick ad was released September 3, said he
was "very proud" of the spots and that the company had seen an uptick
in online traffic and social media mentions since it was released.
"We know its resonated actually quite strongly with consumers,
obviously here in North America but also around the world," he said.
"It's really transcended North America to touch people around the
The comments came as Nike reported a 15 percent jump in earnings for fiscal first quarter 2019 to $1.1 billion.
Revenues climbed 10 percent to $9.9 billion for the period ending August 31.
Nike scored revenue gains in all four of its regions, with the
strongest increase in China, where year-over-year revenues gained 24
percent to $1.4 billion.
However, that jump was a bit below the 35 percent leap in year-over-year revenues reported in the prior quarter.
Nike's results were
also pinched somewhat by higher costs, as it ramps up spending on sports
marketing and its direct selling business. That spending caused the
profit margins to come in below some analyst forecasts.
Chief Financial Officer Andy Campion said full-year revenue growth
was now projected at the low end of the prior range due to the strong
Parker defended the spending as needed to realize the ambitions for
more direct selling to consumers and "becoming more personal at scale."
To that end, Parker said the "Just Do It" campaign with Kaepernick
had succeeded in introducing the slogan to the "new generation of
The name of Kaepernick, a civil rights activist who has been
criticized by President Donald Trump, was not explicitly mentioned
during the call.
The campaign also features other Nike stars, such as tennis player
Serena Williams and American football players Odell Beckham Jr. and
Shaquem Griffin, all of whom were mentioned by Parker.
Some critics took to social media to destroy their Nike garb over
Kaepernick, who has essentially blacklisted by the National Football
League over his civil rights activism.
But many marketing experts consider the campaign a success and some
data has shown an uptick in online sales since the spots were shown. The
ad has been seen as a winner with non-white and younger consumers.
"Like many campaigns, it's driving a real uptake in traffic and
engagement," Parker said on a conference call. "We've seen record
engagement with the brand."
Nike shares had risen 3.2 percent following the ad's release but fell
Tuesday in after-hours trading and were off 4.1 percent to $81.50.