Nike Without Tiger Is Still Nike

Source: Zacks Equity Research

The golf clubs, designed with inputs from all 13 U.S. golf stars who promote Nike's golf products, are attractively priced at $299. The promotional materials of the new product do not mention Woods' name, and instead highlight a lesser-known golf pro, Lucas Glover, who claimed his first major victory when he won the U.S. Open Championship in 2009. Although Tiger Woods remains a Nike-sponsored athlete, the fallout probably stems from the indefinite postponement of his career due to his alleged extramarital affairs.

The new clubs are expected to prop the sagging sales of Nike's Golf Division, whose annual revenue declined 11% from $725 million in 2008 to $648 million in 2009. According to Golf Datatech LLC, a market research firm, sales of golf clubs and other hard equipment fell 11.9% in the first 11 months of 2009 at golf-course shops and specialty stores, as consumers put off discretionary purchases of golf apparel and gear.

Nike leverages a massive and well-established network of more than 23,000 retail accounts in the U.S. and over 28,000 internationally to reach a wide array of customers. The company's retail accounts consist of a mix of footwear stores, sporting goods stores, athletic specialty stores, department stores, skate as well as tennis and golf shops.