Nike Inc. (NYSE: NKE) is scheduled to release its fiscal fourth-quarter financial results after the markets close on Thursday. The consensus estimates from Thomson Reuters call for $0.50 in earnings per share (EPS) and $8.63 billion in revenue. In the same period of last year, Nike posted EPS of $0.49 and $8.24 billion in revenue.

Earlier this month, Nike announced several operational and organizational changes in what it calls its Consumer Direct Offense. Perhaps the biggest highlight was the 2% reduction in the global workforce.

This apparel giant is introducing what it believes to be a more simplified structure that will improve efficiency and enhance connection to the local consumer. There will now be four geographies instead of six, each under one leader: North America; Europe, Middle East and Africa (EMEA); Greater China; and Asia Pacific and Latin America (APLA).

While such an announcement two weeks before the fiscal fourth-quarter scheduled earnings is not a positive, Wedbush believes these changes are being made in recognition of what it believes will be a fiscal 2018 featuring flat to down EPS. According to Wedbush’s earnings preview:

We are lowering our fiscal 2018 EPS estimates given: 1) the US market remains promotional given the changes in MAP pricing and the potential for modest margin pressure within Nike’s direct-to-consumer (DTC), 2) $1.6 billion-$2.0 billion in f/x related pressure between fiscal 2016-2018 with nearly half occurring in fiscal 2018, essentially wiping out nearly all the EPS growth potential, 3) two key events that will drive higher demand creation spend (Olympics and World Cup) and 4) artificially low tax rate in fiscal 2017 (15%) will likely normalize to the 20% level in fiscal 2018. We believe the combination of these factors will drive a more difficult first half of 2018. Nike is taking the right steps around speed and SKU rationalization. However, it will take time for these to meaningfully impact the sales and margins.

A few other analysts also weighed in on Nike ahead of its earnings report:

• Deutsche Bank reiterated an Outperform rating and raised its price target to $67 from $63.
• Jefferies has a Buy rating with a $75 price target.
• Credit Suisse has a Buy rating with a $63 price target.
• Canaccord Genuity has a Hold rating with a $51 price target.
• Telsey Advisory Group has an Outperform rating with a $62 price target.
• Morgan Stanley has an Equal Weight rating with a $56 price target.
• Piper Jaffray has a Neutral rating with a $50 price target.
• Cowen has a Market Perform rating with a $53 price target.
• Barclays has an Overweight rating with a $65 price target.
• Robert Baird has an Outperform rating with a $62 price target.

So far in 2017, Nike has underperformed the broad markets, with the stock down about 5%. Over the past 52 weeks, the stock is up less than 1%.

Shares of Nike were last seen up 0.3% at $53.53 on Thursday, with a consensus analyst price target of $60.59 and a 52-week range of $49.01 to $60.33.

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