Nike Q4 earnings beat consensus expectations. Guiding to low double-digit FY23 Group revenue growth With JD releasing its FY22 results last week, its 4 month current trading statement and FY23 guidance covered Nike’s Q4 reporting period to the end of May. Nike (N/R) reported Q4 EPS of $0.9/s, better than FactSet consensus of $0.8. Q4 Nike Inc reported sales were down 1%, or up +3% at constant currency (the Group reported Q3 sales +5%/CC +8%) with DTC +7% (+11% CC) and Wholesale down 7% (-3% CC). Wholesale was impacted disproportionately by recent supply shortages from when COVID hit production in Vietnam last year. Nike believes it is well-positioned for growth in FY23, despite China likely to continue weighing on performance, given its brand strength, exciting product pipeline, normalising inventory levels, and better availability. Management is guiding to FY23 Group revenue growth of low double digit at constant currency with 400bps FX headwind. In Q1, real dollar revenues are expected to be flat/slightly up flat due to COVID disruptions in China and an over 500bps FX headwind. Nike’s management is planning for mid-single digit price increases and anticipating a more normalise promotional environment in FY23. Its full price realisation rate has been over 70% in 3 of its geographies last year, due to supply constraints, whereas its long-term goal was a 65% rate. Nike also expect its Wholesale channel to return to growth in FY23. Nike’s guidance underpins JD’s forecast assumptions JD’s results last week showed it has emerged from the pandemic with a step-change in earnings, positive momentum into FY23 and net cash of £1.2bn to fund future M&A. Nike’s FY23 guidance suggests consumer demand remains strong and FY23 should be another year of good growth for the sector, helped by innovation and more normalised supply. In our view, this bodes well for JD Sports’ growth prospects and underpins its own guidance, given the strength of its global proposition and multitude of exciting growth opportunities. Corporate governance concerns may well weigh on the shares until a new CEO is announced. However, we see material upside to valuation (CY22E PE 9.5x; CY23E 9.2x) with a disconnect, in our view, between valuation, JD’s fundamental performance and its attractive strategic opportunities. Reiterate BUY.