Nike (NKE 2.32%) is a company that needs no introduction. As it is a globally recognized consumer brand, investors are all too familiar with the famous "Swoosh" logo that can be seen seemingly everywhere we look. 

But from an investment perspective, it hasn't been a smooth ride for investors. Down 6% so far in 2023, the stock is not participating at all in the broader market's rally. And in the past five years, Nike shares have lagged the S&P 500's gain. 

Past results don't matter as much as what the future might hold, though. So, should you buy Nike shares right now? Let's take a closer look at this top apparel and footwear business. 

Latest financials 

Nike increased sales 5% in the most recent quarter (the fourth quarter of 2023, ended May 31). And for the full fiscal year, revenue jumped 10%. That quarterly revenue figure exceeded Wall Street estimates. However, diluted earnings per share (EPS) fell 27% to $0.66, missing analyst expectations -- a rare occurrence for the company.  

Higher product input and freight costs and greater promotional activity resulted in a lower gross margin. Further down the income statement, Nike's overhead expenses rose 10%, helping push down the operating margin to 9.5%. 

Investors weren't pleased with Nike's guidance, as management said they expect revenue to be flat to up single digits in the current quarter, below what Wall Street was looking to see. "We are closely monitoring the macro environment, consumer behavior, and retail trends," CFO Matt Friend said on the Q4 2023 earnings call. 

Unsurprisingly, Greater China was a bright spot, increasing revenue 16% year over year in the fiscal quarter. This has traditionally been Nike's fastest growing region, but it was crushed by ongoing pandemic-related lockdowns that have now eased. This market, which represented 14% of overall company sales in fiscal 2023, continues to be a huge opportunity for Nike as it looks ahead. 

Thinking about the bigger picture 

Despite mixed results, a weaker-than-expected outlook, and the fact that it's still trying to find solid footing following the turmoil of the last few years that included the pandemic, supply chain issues, and inflation, Nike still deserves to be on every investor's radar. 

That's because of its powerful brand recognition, which is the key component of the company's economic moat. As I noted earlier, Nike is recognized all over the world for its high-quality clothing and shoes. The business has been able to sell what are otherwise commoditized products at premium prices. 

This has been boosted by digital sales, which were up 24% in the most recent year. Nike has multiple popular digital apps that have grown in popularity. And these not only raise the visibility of the brand, but they provide the company with a valuable engagement channel. 

Shareholders need to pay attention to inventory and pricing trends in the near term, which are critical factors that can impact how consumers view the brand. As of May 31, Nike's inventory balance was $8.5 billion, flat compared to a year ago. Management's actions may indicate that they think this number is still too high. 

The company has decided to bring back old wholesale partners, like Macy's and DSW, to help push merchandise off the shelves. On one hand, Nike is smart to meet customers where they are in order to help sell excess inventory. But on the other hand, Nike has to balance this decision delicately, not to harm its brand image. 

If history is any indication, Nike should be fine. Since being founded in 1964, its brand has stood the test of time. Consumer demand for its footwear and apparel products has been robust, the company's marketing prowess is top-notch, and its athlete endorsements give the business wide reach and broad exposure. That should bode well for the future because it raises the chances that Nike can stay relevant over many decades. 

At a price-to-sales ratio of 3.4 today, Nike shares are well below their trailing-five-year average of 4.3. Investors might want to pounce at this opportunity.