Last Thursday afternoon, athletic apparel goliath
hogan 2012 Scarpe uomo Nike (NYSE:NKE) announced strong
hogan 2013 scarpe uomo fourth quarter results. Revenue increased 7% year over year to $6.7 billion, modestly exceeding
hogan 2011 scarpe donna consensus expectations. Earnings per share
hogan hogan outlet surged 27% year over year
hogan interactive outlet to $0.76 per share due
hogan scarpe uomo mostly to increased margins,
hogan interactive scarpe uomo
hogan interactive scarpe uomo better than consensus estimates. For the
hogan scarpe donna full year, free cash flow
hogan scarpe donna totaled $2.4 billion on $25 billion of sales.

A few items struck us as the prevailing stories in Nike’s fourth quarter and fiscal year 2013. First, the sustained success of Nike’s
hogan Hogan Olympia North American business
hogan 2012 scarpe donna
hogan interactive scarpe donna is incredible. Revenue in
hogan interactive outlet Nike’s "mature" segment increased 12%
hogan scarpe donna year over year during the
hogan 2012 scarpe donna fourth
hogan scarpe uomo quarter to $2.7 billion. For the full year, revenue in North America increased 18% year over year to $10.4 billion
hogan Hogan Elective donna the first time the company has ever achieved sales in
hogan 2013 scarpe donna excess of
hogan 2012 Scarpe uomo $10 billion in any geographical segment. A wonderful combination of demand creation and inventory management on the footwear side is the strongest growth driver, in our view. For the full year, footwear added $1 billion in incremental sales in North America alone. Nike has done a fantastic job marketing its marquee Jordan, LeBron James, Kobe Bryant, and Kevin Durant basketball products to the point where several shoes sell out in just minutes. This scarcity helps keep consumers engaged and excited about the next major footwear product.

With demand so robust, the firm has been able to raise prices and control distribution meaning Nike sells a great percentage of the marquee shoe mix directly to consumers, which boosts profitability. We can see the impact on both the top and bottom lines, as Nike’s direct to consumer business revenue advanced 24% (excluding currency) year over year to $4.3 billion. North American operating income surged 25% year over year to $2.5 billion.

In stark contrast, the growth market known as China continues to report lackluster results. Revenue (excluding currency) declined 1% during the fourth quarter, and for
hogan interactive scarpe donna the entire year, fell 5% (excluding currency) to $2.4 billion. We think there are several issues at work here. First, we think it is evident economic growth in the country is slowing. Nike, a discretionary name, is exposed to the type of customer that might feel the impact of slowing growth as opposed to simply the wealthy, luxury consumers who may not notice the difference between 7% GDP growth and 10% GDP growth in the
hogan 2012 scarpe donna country.

Additionally, there is a thriving counterfeit market in China, and Nike is among the firms most exposed because it has manufacturing in the country. With economic growth slowing, consumers may gravitate to purchase
hogan 2012 Scarpe uomo black market sneakers, especially when considering the
hogan interactive scarpe donna shoes come from the same factories Nike uses. Since the love for basketball is so strong in China, we doubt Nike will have a hard time growing over the long term in the region, but persistent worries about slowing growth and counterfeits could weigh on results in the
hogan scarpe uomo near term.

Though performance in the Chinese market remains a concern, we
hogan scarpe donna think the story on the cost side of the equation is more compelling. Gross margins were only 10 basis points higher than a year ago for fiscal
hogan Hogan Olympia year 2013, coming in at 43.6%, but we saw some cost pressures in the fourth quarter, with gross margins registering 43.9% (30 basis points higher than the annual mark). Material costs have moderated, but there have been wage increases weighing on the
hogan scarpe uomo overall mix. Nike is working
hogan interactive scarpe donna on eliminating labor as much as possible in the process, as retiring Nike Brand President Charlie Denson noted on the fourth quarter conference call:

I think the longer term solution to addressing a lot of these labor cost issues is really engineering the labor out of the product and that really is with technologies and innovations like Flyknit and there are a number of others that we have in the pipeline that are aimed at the same thing.

(click to enlarge)

Image Source: Nike Q4 FY2013 Earnings Release

Looking ahead, the company provided a strong future orders outlook, primarily in North America,
hogan Hogan Olympia Central Eastern Europe, and Emerging Markets. For fiscal year 2014, the company anticipates low double digit earnings per share expansion, as well as a 25 basis point increase in gross margin. SG will grow in the low double digits for
hogan 2013 scarpe uomo the year, but Nike has shown that its internal investments often pay off via top line revenue growth and incremental gross margin growth.

Valuentum’s TakeOverall, we were pleased with Nike’s 2013 fiscal year, and we are confident the company will continue to produce major footwear hits. In fact, the only regions where growth looked weak (Western Europe and China) have broader economic issues at play that
hogan 2013 scarpe uomo are likely more powerful than Nike could overcome. Nevertheless, we think both of these regions could be weak again in fiscal year 2014.
hogan Hogan Elective donna Our valuation remains unchanged, but Nike is a high quality name we’d love to add to the portfolio of our Best Ideas Newsletter at the right price (below the low end of our fair value estimate range).

Source: Why North America Remains Nike MVP

Disclosure: I
hogan 2011 scarpe donna have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses
hogan 2012 Scarpe uomo my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More.)

Adohr Milk Cream is a US-based company famous for its gorgeous cows with their glamorous digs! Raised near Hollywood, CA…the movie capital of the World…our beautiful bovine are pampered like the stars they are. Our philosophy is “Star-quality cows make star-quality milk�. Our premier line of milk powder baby formulas are nutritionally complete for your rising star.

In the tradition of Old Hollywood, our wholesome, nutritious and delicious newborn, infant and toddler formulas start with milk from A-List cows. The cast of nutritionists and scientists at Adohr Milk Cream have spent years researching and developing the best combination of ingredients to provide optimal nutrition.

At Adohr Milk Cream, we believe your child is the star of your life…from pregnancy through toddlerhood and beyond. Our milk powders provide 100% of the recommended daily supply of vitamins and minerals that are essential for strong teeth and bones, good skin and hair, and a healthy brain. Everything a little star needs to grow.

Since our company was founded, every product we manufacture is done so with traditional values in mind. Our old-fashioned milk powders are made in America and are FDA-approved following strict guidelines and manufacturing processes.