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Tickers in this Article: NKE, ADDYY, SKX, KSWS, FL, FINL, DKS
Although Nike (NYSE:NKE) is well-known as a global athletic brand juggernaut, it may yet still not get all of the credit it deserves. How many suppliers can dominate its retailers like Nike? How many companies have been so successful in their home markets and then ported over that popularity to overseas markets with hardly a hiccup? At best, it is a short list and would probably be made up mostly of much-larger companies like Coca-Cola (NYSE:KO) and Apple (Nasdaq:AAPL).

Looking at Nike's first fiscal quarter results, it seems like this story just keeps rolling on.

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The Quarter that Was
Last year was a tough one, but Nike seems to be bouncing back well. Revenue was up 8% this quarter, with footwear and apparel posting similar growth rates of about 7%. Global futures, though, were up 13%, and that suggests an ongoing consumer recovery. That futures growth was strong in China and in emerging markets was not surprising, but North America futures were also very strong. Perhaps not so surprisingly, Western Europe and Japan were both soft (Japan in particular).

Nike certainly did not fritter away its top-line momentum. Gross margin improved by 80 basis points, due in large part to more direct-to-consumer sales and fewer close-outs. Further down, operating margin improved by nearly the same amount (up 70 basis points), as the company posted nearly 14% operating income growth and coincidentally beat the consensus EPS estimate by about 14%.

The Road Ahead
Someday business will slow for Nike and it will become a lumbering giant. But that day looks to still be quite a long way into the future. Nike still has dreams of putting the "swoosh" on billions of Chinese and Indian feet, even if Adidas (Nasdaq:ADDYY), PUMA, and Li Ning have their own ideas about global competition and Skechers (NYSE:SKX) and K-Swiss (Nasdaq:KSWS) try to nibble on Nike's ankles in the U.S.

In the meantime, Nike continues to pursue some pretty active brand management strategies. Nike has always been aggressive in college athletics and in bringing star athletes into its stable of endorsers. Elsewhere, the company has been more than willing to shuffle assets, as when it sold Starter and Bauer a while ago and bought Umbro. At a minimum, then, this is not a company choosing to rest on its laurels.

The Bottom Line
Nike is a rare supplier in that the health of its retailers is pretty much an afterthought - it simply does not seem to matter how Finish Line (Nasdaq:FINL), Foot Locker (NYSE:FL), and Dick's Sporting Goods (NYSE:DKS) are faring (though Finish Line and Dicks are doing better). One way or another, people get their Nikes even if they do not want anything else in the stores.

Nike's stock has seen a nice little rebound already, and the stock is beyond the point of being "cheap". Nike is a great stock to add to a portfolio on the dips, but even if an ongoing sales recovery leads to expanding multiples, the upside here is probably no better (but also not much worse) than the overall market. (To learn more, see Analyzing Retail Stocks.)

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