Nike (NYSE: NKE) is one of the most iconic athletic brands in the world. The company bounced back strong in 2021 after the pandemic hurt sales in 2020. Management is confident the momentum will continue.
Interestingly, Nike is undertaking a significant strategy shift that could be a bright green flag for investors. Nike is focusing on direct-to-consumer sales, jumping wholesalers sometimes, which could boost gross profit margins in the long run.
Recall that Nike sells directly to customers through its website, app, and owned retail locations. It also generates revenue by selling products to wholesalers, who then sell its products to customers worldwide. Of course, Nike's profit margins are more significant when it sells directly to consumers rather than through wholesalers.
Source Fool.com