There was plenty of excitement among investors after Nike (NYSE: NKE) delivered a better-than-expected earnings report for its latest quarter ended in November (for Nike, its fiscal year Q2). The leading shoe and apparel stock leaped higher by a double-digit percentage in the final days of the calendar year on optimism that the company will be able to make its way past stubborn inflation and mounting economic headwinds going into 2023. 

But I don't think Nike is quite out of the woods yet. While active wear is on trend these days and not going away anytime soon, a high valuation, excess inventory, and sluggish profit growth is curbing my enthusiasm for this particular apparel business.

Nike put up impressive sales numbers in its fiscal Q2, beating Wall Street expectations and delivering a 17% year-over-year increase to $13.3 billion. When excluding currency exchange rates, sales would have grown 27% year over year (more on that in a moment).

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Source Fool.com