This commentary was originally sent to Trifecta Stocks subscribers at 09:40 on Dec. 23.
Despite the sluggish overall retail environment, last night athletic apparel and footwear giant Nike (NKE) once again delivered a stellar quarter, with indications that strength will continue into 2016.
As it relates to our Trifecta Stocks portfolio holding Foot Locker (FL), Nike's performance in FL's core domestic market was robust, easily shaking off larger retail concerns. As Nike commented last night, its North American revenues rose 10% in the quarter, with future orders up 14%. The company continues to see strong demand with its partners, including Foot Locker and Dick's Sporting Goods (DKS).
Nike's strength in running and basketball footwear echoes comments we shared yesterday and plays to Foot Locker's strengths. Given the strong relationship between Nike's North American business and Foot Locker's results, we feel even more comfortable in the outlook for both Foot Locker's business and FL shares.
Our price target on FL shares remains $80.Our initial rating for FL from TheStreet's Quant Ratings team was A-; our current Quant Rating is A.