Trader sees shares go up after report

Nike shares fell more than 3% after the hours of Thursday following the gains.

The shoe maker reported a surprise loss of earnings of 51 cents a share, below estimates at 54 cents. Revenue decreased 38% to $ 6.31 billion, also short expectations.

Ascent Wealth Partners managing director Todd Gordon said he was bullish on the stock ahead of Thursday’s earnings report.

“We believe Nike is a good indication of future sales in China and how the overall Chinese consumer is doing,” Gordon told CNBC’s Trading Nation on Thursday. In its quarter ending in February, “Nike stated that 80% of stores reopened after Covid, and with all closings at national and retail stores, they did a good job transferring to e-commerce sales.”

Gordon hopes Nike will strengthen its e-commerce platform. Nike Direct, its online sales segment, generated almost 32% of total revenue in 2019 and is expected to grow to 35% in 2020. The company reported a 75% increase in digital sales in its quarter ended in May. .

That shift to e-commerce has paid off for Nike’s actions.

“If you look at the beautiful long-term bullish trend here, you can see that we obviously had a bit of volatility along with our broader market during COVID. Since then we have recaptured all losses, resting just below the $ 105 area, than any kind of push would certainly send innovative buyers to the market, “Gordon said.

To take advantage of a higher move, Gordon is buying call 105 and selling call 110 due August 21. This is a bet that Nike can raise up to $ 110 at maturity. It closed at $ 101.40 on Thursday.