Jim Cramer thinks investors should take advantage of Nike Inc NKE's stock, which fell nearly 7 percent last Friday in reaction to its third-quarter results.
What Happened
Nike's earnings report showed weaker-than-expected North American sales growth, which disappointed investors. The earnings print did show many positive metrics, including 9-percent sales growth of footwear in North America and 20-percent footwear and apparel sales growth in China, Cramer said Monday evening.
Nike not only reported a "great" quarter but management followed up on the conference call with encouraging commentary on new initiatives, Cramer said. The company discussed how technology and personalized products supported sales of Air Force 1 and Air Jordans.
Why It's Important
Nike's stock "ran like a champion" in early 2019 after falling so much in the fourth quarter 2018 "on no real news," Cramer said. But there was a piece of news taking a backseat to several disappointing metrics: Nike has shown it's a "tech company masquerading as a sneaker company."
Separate from Nike's earnings, celebrity lawyer Michael Avenatti's arrest for allegedly extorting Nike initially prompted a sell-off Monday. Shares quickly rallied, which Cramer said is a signal it marks the "bottom" for the stock.
Nike's management likely demonstrated to the Street a "classic example of UPOD (under promise, over deliver), Cramer said.
Nike traded higher by 1.2 percent at $83.38 per share Tuesday morning.
Related Links:
Michael Avenatti Charged With Trying To Extort Nike
Experts React To Nike's Q3: Were Expectations Too High?
Photo credit: Emily Elconin.
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