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Nike sales booming after Colin Kaepernick ad and invalidating critics

Nike stock climbed higher on Friday after news of the company breaking expectations for second-quarter sales and confirming the company's controversial Colin Kaepernick advertising campaign released during this period.

The sportswear giant unveiled its Just Do It anniversary campaign during its second quarter, which ended on November 30th. The campaign consisted of former quarterback San Francisco 49ers Colin Kaepernick and quickly sparked praise and boycott calls. However, sales increased. The company jumped 10 percent to $ 847 million, mainly due to strong revenue growth.

The Nike share closed the day down 7.2 percent to $ 72.37 on a day when most of the stock traded significantly lower. The Dow Jones Industrial Average had its worst week in 1

0 years, closing at 22,445.37, down 6.9 percent for the week.

  PHOTO: A Dicks Sporting Goods Inc. business is shown in Frankfurt, March 7, 2018. Luke Sharrett / Bloomberg on Getty Images
A store owned by Dick & # 39; s Sporting Goods Inc. is shown in Frankfurt. Ky, March 7, 2018.

"It looks like a real rebuke to people who said, 'We're going to boycott Nike,' said Professor Jerry Davis, professor at the Michigan University Business School, to ABC News." It turns out that Democrats buy many more sneakers than Republicans. The demo, which is willing to spend $ 200 on Nike sneakers, is not the demo it will boycott because of Kaepernick. "

Davis referred to a legendary quote attributed to Michael Jordan for having evaded politics: "The Republicans are also buying shoes." There are debates as to whether he actually said so, but it is often cited by marketers as an acronym to the explanation of the era when both companies and pitchers stayed out of politics. However, in the past decade, the turnaround has turned because millennials have expected more companies to take a stand on social and political issues, experts say.

  PHOTO: On March 6, 2012, weapons will be displayed at a Dicks Sporting Goods store in Paramus, NJ. Victor J. Blue / Bloomberg on Getty Images, FILE
Weapons sitting at Dick's Sporting Goods Store in Paramus, New Jersey, March 6, 2012.

"I think the consumer wants that Bring brands to social issues, "said Matt Powell, senior sports consultant for the market research firm The NPD Group, to ABC News. "Nike's primary consumer is a male teenager and they're likely to respond positively, unlike a decade earlier when a brand needs to be transparent."

When Dicks Sporting Goods banned the sale of assault rifles after shooting in Parkland, Florida, boycotts threatened accordingly.

Powell tweeted the news, and for every 100 people who responded positively, only one responded negatively. "Only one person said," I will not buy anything from them in response to their attitude. "There certainly seemed to be a lot of support," he said.

"A decade ago, the classic wisdom of brands was kept quiet in this kind of perspective, and now brands need to take a position," Powell added.

Davis attributed the shift to companies that took cultural or political positions, at least in part, due to the rise of social media and detailed customer data.

"Companies that live and die from their brands like Nike carry out much more tracking," Davis said.

"They have a very good sense of who their consumers are and they have a much stronger sense of how people will react," he added. "There is no more neutral ground."

One or two decades ago brands relied on personal focus groups, but now social media brands allow them to monitor customers minute by minute, Davis said. "Nike has a strong sense of who its consumers are."

<img src = "https://s.abcnews.com/images/Business/colin-kaepernick-ad-float-ht-jc-180904_hpMain_4x3_992.jpg" border = "0" width = "640" height = "480" alt = "PHOTO: Colin Kaepernick appears on a Nike ad posted on his Twitter account on September 3, 2018.

Colin Kaepernick / Twitter [19659006] Colin Kaepernick appears in a Nike ad published on September 3, 2018 in his Twitter account.

In fact, Nike introduced a direct-to-consumer strategy last year, moving from marketing to retailers.

"With the macro environment becoming increasingly dynamic, it's clear that Nike's ability to drive direct consumer behavior is driving steady growth in our diverse global portfolio," said Andy Campion, executive vice president and chief financial officer of Nike, Inc. in a corporate statement. "As we continue to invest in digital transformation, we drive consumer centricity in our industry and unlock new growth opportunities."

The speed at which social movements impact corporate behavior has also been compressed due to social media. In the late 1970s, a scandal over Nestle's aggressive marketing practices in developing countries triggered a worldwide boycott that lasted from 1977 to 1984.

In contrast, Delta Airlines launched a campaign to boycott the National Rifle Association following the Parkland massacre in February, among many other brands that lowered their rebates for members of the NRA within 48 hours.

"In two days, that's never happened in the story," Davis said. "The Nestlé boycott took seven years to take effect."

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