Nike (NKE) put on a clinic last night, a tour-de-force explainer why this is a must-own senior growth stock, and it was a stunner. You felt so great about this stock after this call was done, that you could overlook any weakness and embrace any strength.
First, Nike did what everyone should have done this quarter: just tell the story in constant currency. Nike's a worldwide company and it's obvious that it's got headwinds all over the place as the dollar has become cartoonish and garish in its strength. So Nike took the bull by the horns -- or at least the bullish dollar -- and said "you factor it in, we're not going to. We don't have to explain anything that's not our fault." Even when the company was questioned about being able to shift business to different venues to help on this issue, it didn't take the bait.
The impact? Instead of the call being one explanation of the weakness after another, you could use the call to figure out how strong Nike really is and recognize that the franchise is totally unassailable, no matter where it competes. In fact, the essence of this call is "we compete, we win, you figure out the currency."
Now I don't know how much of a student Nike is of the art of the conference call. I say that because Oracle (ORCL) embraced a similar strategy earlier in the week and it was clearly winning. When you compare these two calls with IBM's (IBM) call, for instance, where you thought that IBM had simply done horrendously, you recognize that the Nike-Oracle way is clearly the way to go.
There were other parts of the Nike clinic I loved. One of the crucial elements of the script was the insistence that all speakers use the phrase "sustainable profitable growth." This is another term that the experts of the call use, including the chief financial officer of a company I work for, Comcast (CMCSA), as well as the former CEO of Ford Motor (F). You love these three terms bundled in one phrase, because you know that the companies that only go for growth for growth's sake have completely fallen out of favor. You know the companies that give you growth-less profits, namely the consumer packaged goods companies that Nike is so wary of being lumped in with, are rejected, too.
Believe me, Nike must be concerned about this issue, because it is one of the great household names like Coca Cola (KO) or Kellogg (K), but it does have real growth. And Nike doesn't want to seem episodic in its growth, as if it manufactures high-price branded discretionary goods that will be cut out in an economic downturn. Of course you couldn't pull this claim off if you were weak in the weaker areas, like Southern Rim Europe or China or Brazil. They weren't, so they could do it.
I love how they handled the West coast slowdown-at-the-ports issue by simply pointing out that there are so many containers of Nike still to be off-loaded. They weren't "mea culpa" about it, they just stated it. Here they may have learned the hazards of how Williams-Sonoma (WSM) acknowledged the port concern, because Williams Sonoma scared you to death and had some backing away from it, instead of realizing how well the company could have done, which was their intent.
And Nike stressed invention and technology, as well as its athletic branded merchandise: namely Kobes and Jordans. It resonated. So did its acknowledgement that it answers to the athlete, an interesting discernment from Under Armour (UA), which is no longer going that way. Those who want everyday fitness know UA, those who want performance know Nike, may have been some peoples' takeaway. Mine? Like them both.
In the end, it was a tour-de-force, "congratulations gentlemen" quarter, with strong growth everywhere and an apology for a still excellent American running shoe number that they highlighted as a disappointment. What a bunch of pros. What an amazing stock.
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