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As we continue to present snippets from our Best Ideas call that we held for our institutional clients last week, we move into the Retail sector with a long call on Nike (NKE). Retail Sector Head Brian McGough sees Nike as a great brand and great growth algorithm in the immediate-term TRADE duration. Gross margins have weighed on the stock in recent quarters but we believe that’s about to change. Current consensus expectations for Nike’s upcoming quarter are too low.

Nike’s numbers tell a great future growth story but importantly, their numbers will begin to improve immediately. Inventories are beginning to come down while gross margins improve and that’s something that gives us conviction when looking at NKE.

Watch the above video for McGough’s full take on Nike.