Unfortunately, Nike did poorly in terms of sales. On an adjusted basis, taking into account currencies, revenues rose 2% according to the press release. However, if you do include currencies, revenues decreased 2%. The market seems to be focusing on the sales situation, as this article indicates. Indeed, I can see the market's point. Management stated that worldwide future orders were down by 2% once currency effects were eliminated. If you put currencies back into the equation, demand decreased 10%. What a tough situation for the company: a huge beat on the bottom line, but it's basically of no value to the stock.

You can't help but be bearish on Nike when you read that the company didn't purchase any of its shares during the quarter. It's a great brand, a true leader in footwear, but the recession and the strong dollar are taking their toll. I feel there is too much risk at this point for further downside to the stock to justify buying at current levels. Even if you are a long-term holder wanting to improve your cost basis, you could benefit by remaining patient. Of course, you must perform your own due diligence on that count and make the decision for yourself. From my standpoint, I think Nike is a company to avoid, at least at the moment. Watch its price action in the next week or so to see how the market is adjusting to Nike's sales picture.

Disclosure: I don't own any company mentioned; positions can change without notice.