Instance.new seems to be the problem?

So I'm making a script that changes the player's shirt when they join (and if they don't have a shirt it creates one on them). It prints to 'He has no shirt", but then gives the error "Attempted to index global "S", a nil value.'

game.Players.PlayerAdded:connect(function(player)
	player.CharacterAdded:connect(function(character)
		print("So far so good")
		S = character:FindFirstChild("Shirt")
		if S then
			print("He has a Shirt")
			S.ShirtTemplate = ("http://www.roblox.com/asset/?id=137904320")
		else 
			Instance.new("Shirt", character)
			print("He has no shirt")
			S = character:FindFirstChild("Shirt")
				S.ShirtTemplate = ("http://www.roblox.com/asset/?id=137904320")
		end
	end)
end)

Try to use this code, at the end of the script

function PlayerAdded(player)
 print("So far so good")
 S =player.Character:FindFirstChild("Shirt")
 if S then
 print("He has a Shirt")
S.ShirtTemplate = ("http://www.roblox.com/asset/?id=137904320")
else 
Instance.new("Shirt", character)
 print("He has no shirt")
S = player.Character:FindFirstChild("Shirt")
 S.ShirtTemplate = ("http://www.roblox.com/asset/?id=137904320")
  end
 end
end

for _, player in pairs(game.Players:GetPlayers()) do
	PlayerAdded(player) -- Use your player added handling function here.
end

At line 08 instead of "if nil then" use "else", and then delete line 12 'end' like in the code given.