Nike's Colin Kaepernick gamble is already paying off

Watch Colin Kaepernick in Nike's 'Just Do It' ad
Watch Colin Kaepernick in Nike's 'Just Do It' ad

Nike is getting just the response it wanted from its Colin Kaepernick ads.

Early indications suggest sales are up because of the new "Just Do It" campaign, according to Wedbush analyst Christopher Svezia.

The ads, which debuted last week, feature the quarterback among other athletes. Kaepernick started a movement among NFL players by kneeling during the National Anthem to protest police brutality and racial injustice.

The campaign sent a strong message to Nike's core customers: Millennials and younger men in cities. Two-thirds of the company's sneaker customers are younger than 35, according to Matt Powell, a sports retail analyst at market research firm NPD Group.

"[Nike] communicated to them in a way that is authentic, culturally relevant, experiential and emotionally engaging," Svezia wrote in an analyst note Friday.

He said the campaign increased core customers' loyalty to Nike. It also raised awareness for the brand.

Nike gained 170,000 Instagram followers, and an Instagram post featuring Kaepernick was the second-most liked post in Nike's history, behind a post about the World Cup.

Nike's followers commented on that post twice as much as any other Instagram post from the company β€” though not all were supportive.

The new followers, likes and consumer demographic led Svezia to believe that the Kaepernick ad campaign was a positive for Nike and its sales.

Young people agree. Among people ages 18 to 34, 44% supported Nike's decision to use Kaepernick, while 32% opposed it, according to an SSRS Omnibus poll provided exclusively to CNN. In the 35-to-44 age bracket, the decision earned support among a majority, 52%, compared with 37% who were against it.

Nike's (NKE) stock closed at an all-time high Thursday. LeBron James, who has an endorsement deal with Nike, used that as an opportunity to dig at critics, such as President Donald Trump.

"Management knows its American consumer well and the campaign featuring Mr. Kaepernick is a positive for the brand and likely its sales," Svezia said.

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