Nike (NYSE:NKE) stock had a consistent pattern in 2021. It jumps on earnings.

NKE stock did it again Dec. 20, after the company reported its second fiscal quarter of 2022. Net income was $1.3 billion, 83 cents per share fully diluted, on revenue of $11.4 billion. In response the share price rose over $10 and kept the gain.

In fact, Nike is up 18% for 2021. The market cap of $263 billion is still 43 times earnings.

But those who think Nike stock is too dear are consistently wrong.

The Secret Behind the Gains in NKE Stock

At the heart of Nike’s gains is its direct sales strategy. Direct sales during the quarter were $4.7 billion, up 8% when currency fluctuations were taken out. Online sales rose 12% and in North America alone they were up 40%. Gross margins were a whopping 45.9%.

The structure of Nike has become like that of Lululemon (NASDAQ:LULU), which it finally outperformed this year. By having total control over both its global supply chain and distribution channel, Nike has put its profit machine into overdrive.

Analysts continue to underestimate it. In the face of the latest earnings surprise, they focused on its supply chain problems and falling sales in China.

But as I wrote just before the pandemic, Nike now has more suppliers in Vietnam than in China. It also has one of the best marketing machines in the world. That means it can turn problems to its advantage. It uses tight supply chains to cut sales to wholesalers and maintain profit margins online.

Nike’s online operations can now get your size right from a photograph and let you see how the shoes look on your feet before you buy. It even sells kids’ shoes by subscription, because its technology can watch the little feet grow.

The Apple of Clothing

Investors can take advantage of these trends by buying Nike shares as they fall before earnings. Shares also rose sharply after it reported earnings in September and June. Think of Nike as being like Apple (NASDAQ:AAPL). It uses technology to control both its supply chain and its sales channels to maximize profits.

Consumers who a decade ago bought suits and dresses now routinely go out in jackets and sneakers. Office attire is almost entirely “casual.” Lululemon has made “athleisure” into fashion, and Nike has taken advantage of it. This hastened the death of shopping malls and the fade-out of department stores like Macy’s (NYSE:M) and Nordstrom (NYSE:JWN), whose buyers sought to stay ahead of changing trends. The trends are no longer changing.

What this means is that Nike can easily turn bad news into good news and higher profits. When the pandemic fades it should be able to turn out faster sales growth, without sacrificing margins.

That’s why analysts call each fall in Nike a buying opportunity. Of 23 following it at TipRanks, 19 still have the buy light on, and none are saying sell.

The Bottom Line On NKE Stock

At some point over the last decade Nike went from being an apparel maker to an institution.

Co-founder Phil Knight has been retired since 2016, but his fortune has only grown since. He’s now worth $61 billion and the company’s succession is secure.

The most telling fact from the executive suite is that current CEO John Donahoe formerly ran ServiceNow (NYSE:NOW) and sits as chairman of the board at PayPal (NASDAQ:PYPL).

This means that when the spring buds start coming out in March, and NKE stock falls on worries about this, that, or the other, just buy it. Hang onto it. Give some shares to the kids. It’s a long-term winner.

On the date of publication, Dana Blankenhorn held long positions in NOW and AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Dana Blankenhorn has been a financial journalist since 1978. His latest book is Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, essays on technology available at the Amazon Kindle store. Follow him on Twitter at @danablankenhorn.