Consumer Products

What to Expect From Nike Earnings

Chris Lange

Nike, Inc. (NYSE: NKE) is scheduled to report its fiscal fourth-quarter financial results after the markets close on Tuesday. The consensus estimates are calling for $0.48 in earnings per share (EPS) on $8.28 billion in revenue. The same period from last year had $0.49 in EPS on $7.78 billion in revenue.

This stock was hit hard when a good earnings report came with guidance well below estimates. Nike is the world’s leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities.

Nike’s is a truly global business, and international markets are very promising for the company. Sales, excluding currency fluctuations, grew 27% in Greater China and 29% in central and eastern Europe during the quarter that ended in February.

Nike is benefiting from consumer preferences for “athleisure.” With its extensive product line and recognizable worldwide branding, the stock continues to roll year after year. Driven by its digital business as well as inline and factory stores, Nike now anticipates achieving $16 billion in revenue by the end of fiscal year 2020. Over the next five years incremental growth in Nike brand direct-to-consumer (DTC) revenues is expected to be driven by e-commerce sales, which are projected to grow to $7 billion. The company also expects to drive wholesale growth in the mid-to-high single-digit range over the next five years.

A few analysts weighed in on Nike ahead of the earnings report:

  • Brean Capital has a Buy rating with a $68 price target
  • Goldman Sachs has a Buy rating with a $67 price target
  • B. Riley reiterated a Buy rating with a $66 price target
  • Cowen reiterated a Buy rating
  • Robert Baird reiterated an Overweight rating with a $70 price target
  • Merrill Lynch reiterated a Neutral rating with a $60 price target
  • Susquehanna reiterated a Positive rating with a $74 price target
  • Telsey Advisory Group has an Outperform rating with a $69 price target
  • BB&T reiterated a Buy rating with a $70 price target
  • Buckingham reiterated a Buy rating with a $70 price target
  • Jefferies reiterated a Buy rating with a $67 price target

So far in 2016 Nike has underperformed the broad markets with the stock down about 15%. However over the past 52-weeks the stock is actually flat.

Shares of Nike closed Monday down 1.3% at $51.89, with a consensus analyst price target of $70.52 and a 52-week trading range of $47.25 to $68.19. In early trading indications Tuesday, the stock is up about 0.8% at $52.32.