If you thought Nike (NYSE:NKE) wouldn’t get socked by the waning consumer and waxing inflation, then you fought a lot of conventional thinking. And you would have turned out to be right, too; Nike is up over 6% in Friday morning’s trading thanks to a mixed-bag earnings report and some guidance that suggests the next three months of economic troubles may not impact Nike’s sales all that hard either.
Nike delivered an oddly mixed-bag report, turning in a beat for earnings, but a miss on revenue, missing the projections of $13 billion even by posting a meager $12.94 billion. That $12.94 billion, however, was up 2% against the first fiscal quarter of 2023. Moreover, Nike’s previously established plan of pushing direct-to-consumer sales worked out great, as Nike Direct revenues were up 6% against this time last year. Even Nike Brand Digital sales managed to notch up 2%.
Nike’s guidance, meanwhile, was likely what carried the day. Nike pointed out its China business was on the rise, with at least two consecutive quarters of growth measured in double-digit figures, and some general improving conditions are helping out too. For instance, ocean freight rates—which were disastrously high—are in open decline. This is allowing for more “strategic pricing,” as well as better markdowns on current items. That’s letting Nike build a better overall future with “…sustainable and more profitable long-term growth.”
Is It Good to Buy Nike Stock?
Ultimately, Nike still enjoys extensive analyst support. With 19 Buy ratings, nine Holds, and two Sells, Nike stock is currently considered a Moderate Buy by analysts. Further, with an average price target of $121.80, Nike stock comes with 27.61% upside potential.