Nike’s Q1 Earnings

Nike’s Q1 Earnings came out yesterday and we think it is worth mentioning some of the results. It’s very important to point out that although shoes are a staple, a Nike shoe is a bit more of a discretionary purchase, and spending on a product like this is positive because it tells us the consumer remains very strong. We also want to point out that the consumer is the largest and most important component of both the US and Chinese economy. BEAVERTON, Ore., Sept. 24, 2019 – NIKE, Inc. (NYSE:NKE) today reported fiscal 2020 financial results for its first quarter ended August 31, 2019. Revenue increased to $10.7 billion in the first quarter, up 7 percent on a reported basis and up 10 percent on a currency-neutral basis*, driven by growth across all geographies. “Our strong start to FY20 highlighted the depth and balance of NIKE’s complete offense,” said Mark Parker, Chairman, President and CEO, NIKE, Inc. “NIKE’s strong product innovation, combined with our industry-leading digital experiences, continue to deepen our consumer relationships around the world.”** These are the best  top line results we have seen out of Nike in 4 years of holding the stock, but more importantly we can see the consumer has yet to weaken despite the headline of recession.  On top of this, we have been in recessionary headlines for approximately a year, and Nikes results are accelerating higher not weakening as headlines would have you believe. Looking Below: You can see that globally the consumer has remained strong specifically in both China and the USA- despite Trade War headlines. There were a lot of really positive headlines within this company, as more sales moved online, and therefore have higher margins than the older wholesale distribution platform. Markets continue to remain sideways and challenging, but we think it is very important to base decisions on facts, not headlines, these facts are terrific, and Nikes stocks just gapped up to its all-time high: See full earnings release here: https://s1.q4cdn.com/806093406/files/doc_financials/2020/Q1/FY20-Q1-Combined-NIKE-Press-Release-Schedules-FINAL.pdf Happy to discuss portfolio’s at your leisure, call in any time. Chris

Rick

Rebecca