Gimme panic, gimme doubt, and gimme worries about short-term performance. Especially when we're talking about a top-notch brand like Nike (NYSE: NKE ) .
The stock seems to have been mostly just biding its time for the past year and a half or so as people worry about overseas demand, competition, future orders, and whatever else they can think up. And to be fair, management guidance hasn't exactly always discouraged the notion that times could be a little tougher in the industry.
All the same, I look at this quarter's results and don't find myself especially troubled. Revenue was up about 9% (up 12% without the impact of currency), and gross margins eased a bit -- mostly on account of higher material costs. That said, the company cut back on its SG&A spending and posted 19% growth in net income and 23% growth in per-share earnings.
Growth was strong (as in double-digit revenue increases) in Asia and the Americas, including the U.S., with footwear sales doing the bulk of the heavy lifting. Europe wasn't so hot, though, as reported sales fell and currency-adjusted sales were up in the low- to mid-single-digit range. On a worldwide basis, apparel seemed to have turned in a so-so performance (outside the Americas). Likewise for the small-equipment business.
While I wasn't exactly thrilled to see the management shakeup back in January, I don't see it being a major long-term issue. In fact, the new guy seems to have a pretty appealing pedigree, and I like a guy with brand-building experience running a company that is largely all about brands.
Furthermore, if the market for footwear and related apparel turns out to be getting tougher, that could be a long-term plus for Nike. When times get tough, the strong lions get weaker, but the weak lions often die off. And given that Adidas is apparently having some issues with Reebok already, that might suggest that a major competitor is already a bit distracted these days.
And don't forget the possibility of an M&A boost -- Nike could easily look at companies like New Balance, Timberland (NYSE: TBL ) , Columbia Sportswear (Nasdaq: COLM ) , or UnderArmor (Nasdaq: UARM ) as logical targets.
Bottom line -- I like Nike. In fact, I like it enough to give it one of the top spots on my watch list. I think you could buy today and be happy with where you are in a few years' time. Of course, a nice little market panic wouldn't be a terrible thing ... if you're looking to buy, that is.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).
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