This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Nike Still Setting the Pace

Stocks in this article: NKEUAADDYYLULUMCDKO

NEW YORK ( TheStreet) -- With shares of Nike (NKE) soaring to new all-time highs following the company's strong fiscal first-quarter earnings report, it's hard to believe there was ever a point in the not-so-distant past when the Street seemed too fixated on the company's struggles in Europe and China. However, as I've noted here and here, despite these obstacles, Nike very rarely (if ever) trips over its own feet. And it was only a matter of time before management cleared the hurdles with more innovation and product development.

Today, with China showing modest growth improvements, combined with strong acceleration in Nike's futures, the athletic-wear giant, which has never struggled with market share, is poised to recapture any margin leverage it has lost. And if the company's recent results serve as indication, investors who've been waiting patiently on the sidelines for this stock to fall down to fair value are going to be very disappointed.

Unlike at any point during this past fiscal year, Nike's first-quarter results made me wonder "What China problem?" This is the same question that rivals like Under Armour (UA) and Adidas (ADDYY) are asking today since they could never truly capitalize on Nike's slowdown. While Nike hasn't completely solved the economic headwinds in China, management has been working hard not only to reduce the company's inventory, but also adjust to the new buying trends of Chinese consumers.

In that regard, given the 38% growth in net income, which beat Street estimates by 8 cents a share, it's safe to say that Nike's management continues to pull all of the right strings. Revenue, meanwhile, advanced 8% year over year, helped by robust growth in North America. For that matter, except for China, where revenue declined 3% (excluding currency impacts), Nike saw growth in every other region.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,805.41 +127.51 0.76%
S&P 500 1,964.58 +13.76 0.71%
NASDAQ 4,483.7150 +30.9230 0.69%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs