Nike Inc (NKE) Stock Looks Better on Amazon Boost to Omni-Channel

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Nike Inc (NYSE:NKE) has been off to the races since posting a strong earnings beat that shocked Wall Street on June 29. NKE stock is up 8.7% since the announcement while the S&P 500 index off by less than 1% in that time.

Nike Inc (NKE) Stock Looks Better on Amazon Boost to Omni-Channel

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Management also confirmed that the company will begin a new relationship with Amazon.com, Inc. (NASDAQ:AMZN) that could ultimately be a greater part of their omni-channel sales efforts.

In the fourth quarter, Nike saw earnings of 60 cents a share, better than estimates of 50 cents a share and up from 49 cents the year prior. Revenue increased 6% year-over-year to $8.7 billion, $100 million better than expectations of $8.6 billion.

While Nike-brand sportswear can already be found on Amazon, those products are being sold through third-party retailers. In the pilot test, the company will sell selected items directly on the site, which gives the athletic-wear maker direct access to its customers and can help defend the brand against counterfeiting and the like.

NKE stock took off on the news — soaring as much as 12% to a 10-month high — but have since settled into a narrow trading range between $57 and $58. The big question now is what will be the stock’s next catalyst in this ever-changing world of brick-and-mortar retail?

Perhaps a victim of its own success, Nike has made sneakers so popular that they moved from basketball courts to the viewing stands and become a part of the hip fashion scene.

And while the company was missing its own Frankenstein’s monster, its overseas rival, adidas AG (ADR) (OTCMKTS:ADDYY), which had been written off as nothing more than a player in soccer footwear, picked up on this and brought in big-name stars — not athletes — to propel its move, particularly in America.

I find it ironic that I took my son to a Kanye West concert three years ago and he complained for half-an-hour about Nike dropping his sneaker line. The stock had been ready to pull back big time while Adidas was getting ready rock.

Here we are now and while I am impressed with Nike’s initial deal with Amazon, I think holders of lower-priced shares might consider locking in what I suspect are some pretty solid profits. If you’re a would-be buyer of NKE stock, you may want to wait for more developments and the next round of earnings before committing fresh capital to the name.

Regardless, this is a stock I’m keeping an eye on over the long-term. It’s a strong company and I expect it to continue growing for years to come.

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Article printed from InvestorPlace Media, https://investorplace.com/2017/07/nike-inc-nke-stock-looks-better-on-amazon-boost-to-omni-channel/.

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