Nike (NYSE:) is still a growth company with plenty of market opportunities ahead, according to its Executive Vice President and Chief Financial Officer Matt Friend.

Friend spoke out after the Q1 company financial results were released. He praised the company’s Consumer Direct Acceleration strategy and said that “NIKE” is a growing company with a huge market opportunity. The Q1 results of NIKE show that the company’s Consumer Direct Acceleration strategy is continuing to drive growth and transform our long term financial model.

Nike has changed its business strategy since last year. The company switched from an indirect business model to one that is direct, thereby removing the middlemen. The athletic apparel brand saw its operating margins increase from about 8 percent in May 2020, to around 15.5 percent during the latest quarter.

Nike stock is a good investment. (See Nike stock charts on TipRanks)

Solid Performance at Nike

Nike had a solid Q1. Revenues grew by 12 percent thanks to NIKE Direct growth, normalization of own physical retail which grew 24 per cent, exceeding the pre-pandemic levels of the first quarter fiscal 2020. NIKE Brand Digital continued to grow, with a 25 percent increase, aided by a 43 percent North American growth.

The global supply chain problems meant that Nike’s results were even more impressive. While Nike ended FY2021 with record revenues, global COVID-19 supply chain problems have put a strain on the brand’s reputation. According to Ms. Mousumi Bhari, Avionos’ Digital Strategy Practice Leader, Nike had to close factories in Vietnam due to COVID-19 epidemics in July. This could have a negative impact on the company’s sales going into next year.

Nike’s Advantage: Connection with Customers

Nike has many competitive advantages, including branding, scale and scope, customization, and innovation. Its greatest advantage is its customer relationships. John Donahoe, President & CEO of NIKE, Inc., stated that NIKE’s solid results in the quarter were a testament to its deep customer connections, innovative pipeline, and a digital advantage which fuels brand momentum.

Wall Street is taking notice. Nike has consistently been an outstanding performer. The company’s average annual return has been 23% over the past ten years, as compared with just 16% for the.

The Analysts’ Take

Nike has a strong following in the analyst community. The shares were followed by 24 analysts over the past three months. They received a strong buying rating and an average target price of $186.04 for the next twelve months. There was a high forecast at $213.00, low forecast at $168.00, and high forecasts of $213.00. Average Nike price targets represent a 23.95% increase over the previous price of $149.59.

Bottom Line

Nike sees plenty of opportunities ahead, and it is well prepared to exploit them, delivering superior returns to its stockholders.

Disclosure: Panos Mourdoukoutas was a Nike employee at the time this article was published.

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