We've gotten used to slam dunks from Nike (NYSE: NKE). Even through most of the pandemic, Nike has managed to grow revenue and profit. But two elements in the most recent earnings report prompted a big reaction from investors. And it wasn't positive. The stock fell more than 12% in one trading session.

The maker of athletic apparel and shoes disappointed investors last week when it reported high inventory levels and a decrease in gross margin. Like many retailers, Nike faces higher costs and supply chain troubles. And the challenges aren't over. Considering this, is this market leader still a buy? Let's find out.

The bad news first. Nike struggled in two particular areas in the fiscal 2023 first quarter. We'll talk about gross margin first. It fell 220 basis points to 44.3%.

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Source Fool.com