One of the most anticipated earnings report this week was for Nike’s (NYSE:NKE) fiscal first-quarter 2019 results. This year, Nike stock has consistently added gains in the markets despite a competitive sports-apparel sector, moving deep into double-digit territory. However, investors have voiced concerns about the rally’s sustainability.

Prior to the earnings disclosure, all eyes focused on former NFL quarterback Colin Kaepernick. The controversial figure sparked the national anthem protest in which he took a knee instead of standing per tradition. Kaepernick stated that he did so to bring attention to police brutality against African-Americans. The tactic worked, but with consequences.

Conservatives responded angrily that the anthem protests disrespected the flag. Although that was never the stated intention, the optics didn’t look good. Add in the fact that the NFL has strong ties to the military, and you get a combustible, divisive situation.

When Nike decided to run an advertisement featuring Kaepernick, several investors held their collective breath. Would the NKE stock earnings report provide justification for the move, or did it turn out to be a disaster? And how would the markets respond to the company’s overall business?

Let’s take a deeper look at the numbers for Nike stock:

Solid Beat Across the Board for Nike

Those who had doubts about NKE pulling in the numbers ultimately didn’t have anything to worry about. The footwear and apparel-maker produced yet another solid earnings beat. The markets anticipated more than the company delivered, however, producing surprising volatility during extended trading.

For fiscal Q1, consensus estimates pegged earnings per share at 63 cents. Individual forecasts ranged from 56 cents to 69 cents. NKE recorded 67 cents, or a 7% positive surprise.

The EPS haul also represented a decent swing up from the year-ago quarter’s result. At that time, the company delivered EPS of 57 cents against a 48-cent consensus target.

On the revenue front, Nike rang up $9.95 billion. This compared slightly favorably to the consensus that called for $9.94 billion. That said, in fiscal Q1 2018, the company hauled in just under $9.1 billion. Thus, the apparel-maker nearly increased sales by 10% year-over-year.

You’d imagine that the solid performance would spark renewed interest in Nike stock. Instead, the opposite happened. While shares closed up 0.6% prior to Q1, during after-hours trading, they fell 3.5%.

What caused the discrepancy between investor sentiment and the positive NKE stock earnings report? Some analysts have stated that the 10% YOY revenue growth was disappointing. Considering that Nike is actively attempting to steal market share from Adidas (OTCMKTS:ADDYY) and Under Armour (NYSE:UA, NYSE:UAA), I can understand their hesitation.

However, I think the bears are excessively nitpicking the NKE stock earnings report. A pleasant surprise to me was Nike’s international sales. Specifically, China sales, excluding currency impact, jumped 20%. That’s extremely significant for the obvious reason that we’re locked in economic conflict against China.

But on another note, this proves that Nike products are second to none despite nationalistic undertones. That’s a net positive for Nike stock.

Kaepernick Is a Definite Asset for Nike stock

Now let’s address what everyone is talking about. In my last write-up for Nike stock, I posed the question about whether Kaepernick is an asset or liability. Reading management’s thoughts on the matter and the metrics, we can only come to one conclusion: Kaepernick complements Nike’s brand and mission, and will add to the bottom line.

Nike CEO Mark Parker stated that his leadership team is “very proud” of their Kaepernick ad. They have good reason to be. The company achieved record engagement with the ad, and I don’t think this was a fluke. I saw the supposedly-controversial segment, and while I’m not a content expert, people are making much ado about nothing.

The term “Kaepernick ad,” while descriptive for headline purposes, isn’t quite accurate. Mostly, Nike focuses on the strength of the human spirit, of our inherent ability to overcome enormous challenges. Only in the end does the segment reveal Kaepernick as the narrator. When he does finally appear, we see Kaepernick’s humanity.

Yes, the former quarterback still arouses anger among conservatives. This led to the markets initially penalizing Nike stock. But eventually, shares recovered. And moving forward, I expect further gains.

The international sales were very encouraging. Aside from China, Asia Pacific and Latin America gained 14%. Europe, Middle East, and Africa saw a 9% jump. Domestically, I expect Kaepernick to produce positive synergies for Nike stock. Demographics are changing, and they largely support his social advocacy.

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.