Nike (NYSE: NKE) doesn’t shy away from difficult subjects, and the current protest movement is no exception. It shouldn’t be surprising that the company that stood by Colin Kaepernick would have something to say this week about the George Floyd and Black Lives Matter demonstrations.

Companies normally avoid topics like race relations, especially in advertising. It’s too tricky and the chance of offending is too great.

Remember when some customers burned their Nike sneakers in protest over the company’s 30th anniversary “Just Do It” ads which featured Kaepernick? The 2018 ad’s text read: “Believe in something. Even if it means sacrificing everything.”

Nike executives knew there would be a backlash, but they surely did the math. In the long run, Nike determined that being associated with social justice would ultimately boost its brand. In fact, the Beaverton, Oregon-based athletic apparel company has made progressive activism a part of its DNA.

Aligning With a Movement

On Friday, Nike released a video ad addressing racism in America. The simple black-and-white ad read in part, “For Once, Don’t Do It … Don’t pretend there’s not a problem in America … Don’t turn your back on racism.”

The ad currently dominates the Nike.com homepage. There’s no merchandise visible for visitors of the e-commerce site.

On Twitter, the ad has been viewed over 7 million times, and been re-Tweeted nearly 100,000 times. Nearly 800,000 people were talking about Nike on Facebook in recent days, according to Thinknum, which tracks how corporations use social media. That’s more than three times the usual amount.

It’s difficult to measure the impact of increased social media engagement on the bottom line. But marketers say it is crucial for growing brands and sales. “It certainly looks like a win for the brand that has increasingly taken on difficult positions and inserted itself into US and global culture not as a force for sports – but as a force for good,” said Jon Marino, finance editor at Thinknum.

Thinknum acknowledges that some of those Facebook posts were people angered by the protests. Some consumers will focus on looting and violence, rather than the peaceful protests for police reform and racial equality.

“It’s impossible to please everyone, and certainly when weighing in on issues as critical and as controversial as police brutality and social justice,” Marino said. “Nike went out on a limb, made a bet, and once again, it probably paid off.”

Meanwhile, an Online Shift

As mentioned, current visitors to Nike.com won’t see shoes or other merchandise on the first click. But for the long term, the company is well poised in the e-commerce space, analysts say. The company excels at creating online buzz in the consumer discretionary space and driving web sales.

On Monday, Cowen & Co. boosted its price target $85 to $110. The company ranks Nike as Outperform. With an average 12-month price target of $99.04, the stock price was around $103 at midday on Wednesday. Nike shares are up about 2.5% year to date, compared with the S&P 500, which is down about 3.5%.

Analyst John Kernan sees great potential in the “accelerating shift to Nike.com.” He noted that the company’s website and SNKRS app have experienced a compound annual growth rate of about 35% for the past five years.

Kernan noted that Web sales bring higher earnings before interests and taxes than traditional retail sales. It’s believed that the coronavirus pandemic has only accelerated online sales. As of May 14, only 5% of Nike’s retail locations in North America had reopened. Even those stores are operating under reduced hours.

Stores Are Still Important

But Nike needs to get those retail outlets open again, with enhanced safety precautions. Lines reached 40 people at a Nike store in Atlanta after it reopened last week, an analyst for Raymond James reported.

The company is pushing contactless payments in stores, using the Nike app. Heidi O’Neill, president of direct to consumer at Nike, recently talked about the reopenings on “Good Morning America.”

She said South Korea and China, where 100% of Nike stores have reopened, provide a great model for U.S. stores to follow. Beyond following government and health guidelines, “We’re providing some great new services that make shopping easier and safer in the world of social distancing,” O’Neill said.

That includes self-checkout where customers can completely avoid the cash register and checkout line. Store displays encourage customers to “click to buy” or “click to try.” Using the Nike app to scan barcodes, customers can have an item sent directly to the fitting room or a checkout area if they’re ready to buy.

How all of this translates to the bottom line will become clearer this month when Nike reports fourth-quarter and full-year earnings for the fiscal year. The closure of bricks-and-mortar stores is expected to have an impact.

Stock market analysts are anticipating $0.18 earnings per share (EPS) on $8.09 billion in revenue. That compares with $0.62 in EPS and $10.18 billion in revenue last year.

For the full fiscal year, consensus estimates are $2.18 in EPS and $38.85 billion in revenue. The previous year’s figures were $2.49 in EPS and $39.12 billion in revenue.

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