Shares of athletic footwear titan NIKE (NKEFree NIKE Stock Report) are up sharply today after the company announced its results for the fiscal fourth quarter of 2018 (ended May 31st). The report showed that the Dow-30 member beat both revenue and earnings expectations by handsome margins, and the vital North American market returned to growth mode after a number of negative readings on a sequential basis. This last tidbit of information is something the investment community has been watching closely, and its disclosure certainly added nicely to the bullish momentum the stock is currently experiencing.

From a top-line perspective, sales came in at $9.79 billion, well ahead of our $9.42 billion call and the consensus, which had fallen to around the $9.35 billion area of late. Excluding currency changes, receipts climbed 10% in Europe, the Middle East, and Africa, and 25% in Greater China. The Asia/Pacific region and Latin America clocked in with a 13% advance. Breaking it down by category, footwear sales were up 8%, apparel receipts surged 15%, and equipment sales fell 3%. The latter is not all that bad considering NIKE exited some markets, most notably golf equipment. But all these figures were trumped, at least from an enthusiasm standpoint, by the positive showing of North America. Here, sales increased by 2.76%, a number to get excited about after competition had forced this comparison into the red for a stretch. We were not looking for a positive reading here and even the largest supporters of the swoosh on Wall Street had estimated growth of under 1%. Specialization and a direct-to-consumer approach are certainly paying off, as is the bevy of licensing agreements the company has with high-profile organizations like the National Basketball Association.

In terms of share net, the metric came in at $0.69, up from $0.60 in the year-earlier period, and a nickel better than both our and the Street's consensus of $0.64. Gross margin was up to 44.7%, versus 44.1% in the same quarter of fiscal 2017. The improvement was generated on the back of higher average selling prices and the push into the lower-cost model that sells directly to shoppers. For the full fiscal year, earnings summed to $2.40 a share, a decline from the $2.51 posted in fiscal 2017. Nonetheless, investors will likely be pleased, given that the initial expectations for the fiscal year just ended started out significantly lower.

Looking ahead to fiscal 2019, which started June 1st, we are boosting both our top- and bottom-line estimates on the heels of the strong close to fiscal 2018. Previously, management had stated they were looking for a top-line advance in the mid- to high-single digit range. Now that spread has been tightened to a high-single digit range. With that, our updated revenue target is $39.25 billion, it was previously $38.77 billion. That level of sales should equate to earnings of $2.80 a share, or a dime higher than our expectation at the time of our full-page April report. Separately, leadership announced plans to repurchase $15 billion of its Class B shares over the next four years. This buyback program is on tap to start in fiscal 2019 after the current $12 billion authorization is complete. Improved North American sales, coupled with taking shares off the table, has led us to add a quarter to our EPS projection for the pull to 2021-2023, which now stands at $5.00.

So are NIKE shares worth investment considerations? At the price point following today's run-up, it may now be suitable for selective accounts. Our Highest (1) ranking for Safety and Financial Strength grade of A++ are alluring for some investors. However, NKE is now trading near the bottom rung of our 3- to 5-year Target Price Range and, therefore, long-term appreciation potential is not what it was just a few months back. Too, the dividend yield is subpar versus the Value Line median. In general, those looking for a relatively safe play with decent total return from a blue chip might be inclined to try this footwear maker on, but we still think better selections exist for that mix within the Dow 30.

About The CompanyNIKE, Inc. designs, develops, and markets footwear, apparel, equipment, accessories, and services. It sells products to retail accounts, through NIKE-owned retail stores and the Internet, and through a mix of independent distributors and licensees in approximately 190 countries. Subsidiary brands include Converse casual sneakers and Hurley lifestyle apparel and accessories.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.