Nike (NKE) has been a train wreck for most of the year.

But it is showing some signs of life again. In fact, since the end of September, NKE gapped from about $88.66 to a current price of $95.89. For one, the company just beat on earnings. In fact, in its first fiscal quarter, EPS of $0.94 beat $0.75 expectations. Unfortunately, revenue of $12.94 billion did miss the estimate for $12.99 billion. 

However, Nike did provide solid guidance on its earnings call. 

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“During the call, Nike (NKE) said it expects FQ2 revenue growth to be up slightly in comparison to last year. Gross margins are anticipated to expand approximately 100 basis points from a year ago, reflecting benefits from strategic pricing, improved markdowns, and lower ocean freight rates, partially offset by higher product input costs,” as noted by Seeking Alpha.

CFO Matt Friend added, “We are building on a strong foundation for sustainable and more profitable long-term growth,” he noted. Nike (NKE) continues to expect a negative impact from foreign exchange headwinds.”

Weakness may be an opportunity for NKE.

Sincerely,

Ian Cooper