Air Max Day a Positive Sign for Nike’s New Innovation Pipeline, Analyst Says
Air Max Day, Nike’s annual celebration of the popular footwear franchise, might have provided the brand with the boost it needs during a critical turning point.
The event, which marks the anniversary of the first-ever Air Max launch in 1987, came at a fortuitous time for Nike, which has recently come under criticism for its lack of innovative new products. In response to the criticism, Nike last week announced its plan to build a “multiyear cycle of innovation” to win over consumers.
According to Wedbush analyst Tom Nikic, Tuesday’s Air Max Day was a resounding success, and likely helped Nike get its “new innovation cycle off on the right foot.”
“While shares have languished recently due to investor frustration over Nike’s lack of exciting new products, we believe the company got a bit of much-needed good news on their annual ‘Air Max Day’ celebration,” Nikic wrote in a Tuesday note to investors.
Notably, Nike on Tuesday debuted its new Air Max DN model in several colorways, which Nikic said completely sold out on Nike.com. Nike revealed the polarizing silhouette in February. At the time, the company said in a statement that it set out to create “something Air Max lovers haven’t seen before” in terms of the shoe’s look, which features Dynamic Air: a dual-chamber, four-tubed unit designed for comfort.
In a call with analysts last week, Nike president and chief executive officer John Donahoe said that the Air Max Dn is one example of how a new cycle of innovation can help lift other products in the marketplace.
“Our experience has been that when we launch a strong new product, it creates energy for the whole family,” Donahoe said, explaining how Nike saw an uptick in other Air Max franchises when it teased the new Dn. “It all speaks to the confidence we feel when we look at our overall innovation engine and pipeline from Air to the rest of the portfolio.”
According to data from eBay, users searched for “Air Max” roughly 37 times a minute globally between March 1 and 13. In terms of silhouettes, eBay stated the top-searched Nike Air Max styles on the platform globally are the Nike Air Max 90, the Nike Air Max 1 and the Nike Air Max 95.
“We see the successful initial launch as a positive data point for the brand,” Nikic said, noting that it will take more than one hit sneaker for Nike to change its narrative regarding innovation. “A steady flow of innovation will also be important because they are simultaneously facing a headwind from reduced sell-in of older styles.”
Donahoe also confirmed that Nike has already developed a new Air Max for next year and the following year.
Nike last week reported sales and earnings results that beat expectations, following a challenging Q2 in December, when Nike announced new measures to “streamline” its organization to save up to $2 billion in costs over the next three years. These measures included layoffs, product simplification and increased automation.