Nike Q3 - North America Prevails

Nike released excellent quarterly results on Monday night. Before we take a closer look at those numbers I want to review the last few years of Nike's share price movement.

Nike benefitted from Covid lockdowns. People exercised more and worked from home in comfortable athleisure clothing. Customers avoided physical stores, so their direct-to-consumer online channels thrived. The share price enjoyed an epic rally, and peaked in November 2021 at $179 a share. However, since the world started normalising and the general market took a hit, Nike shares dropped by 28% in 3 months. That's a nasty fall for what many consider a really solid, blue chip company. Nike's big exposure to China may also worried some traders, as tensions between the US and that country have risen.

Nike shares rose with the overall market last week and then added on a further 2% gain when the quarterly results were released. Sales in greater China were better than expected and their online channels continued to thrive. Nike's direct sales grew 17% and now contribute 42% of total revenues. Having fewer middlemen means greater profits for Nike.

This is a smartly-run business that manages its supply chain very well. Their operations team finds alternate solutions; bottlenecks are not an acceptable excuse. They innovate strongly, especially in the sneaker and running shoe markets. The brand is world class, which allows them to push price increases onto the consumer. We strongly recommend that you buy more Nike shares now, before it swooshes higher.