What's going on?

Nike’s fourth-quarter earnings suggest the firm�s getting its mojo back.

What does this mean?

Nike�s had a rocky year or so dealing with unsold inventory, sky-high shipping costs, and sluggish Chinese sales. But things are looking up now: while the firm�s still wrestling with leftover stock and stubborn costs under the surface, strong sales growth is pulling it along. With a solid 5% increase overall, a 16% jump in China, and a 15% leap in its vital direct-to-consumer sector, it looks like Nike�s brand is still fit as a fiddle. So while the slightly lower-than-expected forecasts might have some investors faltering, Nike�s got a clear message: inventory and cost headaches are temporary hiccups, but strong sales are here to stay.

Why should I care?

Zooming in: Direct dimes.
Nike’s been sprinting away from its wholesale buddies for a while now, and making a beeline for customers online and in its own stores instead. So far, that strategy has swollen direct-to-consumer sales to more than half of Nike’s total pie � and with 15% growth in direct sales last quarter, that slice only seems set to grow. And that�s a good thing: see, cutting out the middleman means that Nike pockets more profit � a surefire way to fatten margins over time.

Zooming out: Don�t speak too soon.
In the post-earnings conference call, Nike’s CEO declared that the Chinese consumer is back and ready to spend. But that might come as news to the country�s government. After all, years of lockdowns have shaken consumer confidence, and spending�s still in a slump. Plus, fresh data suggests that factory activity took a hit for the third straight month in June. But hey � maybe the mad dash for Air Jordans does mean the Chinese consumer’s still got game.