Nike Inc (NYSE: NKE) investors are optimistic ahead of the company’s fiscal third-quarter earnings report expected on March 22. Positive earnings commentary from other companies suggests Nike likely had a solid holiday quarter, and analysts are feeling pretty good about the stock.
Wall Street analysts are expecting Nike to report earnings per share of 53 cents on revenue of $8.84 billion. Analysts are expecting full fiscal year 2018 guidance of $2.31 in EPS and $35.80 billion in revenue.
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In its own earnings call, Dick’s Sporting Goods ( DKS) management gave some positive commentary on Nike product performance in its stores last quarter. Adidas also reported a 31 percent increase in North American sales in the quarter, which bodes well for Nike’s struggling North American business.
Nike will likely also address the recent departure of brand president Trevor Edwards. Following Edwards’ resignation, Nike said it is in the process of reviewing its human resources practices in response to recent complaints from employees.
Analysts aren’t expecting any surprises from Nike on Thursday. The Buckingham Research Group analyst Eric Tracy is predicting Nike will report 55 cents in EPS and a modest revenue miss.
“While we maintain our constructive stance in the name over intermediate/long-term, we believe risk/reward is somewhat tempered into [the] 3Q print on a combination of lingering margin/near-term fundamental pressures, recent share strength and rising market expectations,” Tracy says.
Buckingham is projecting full-year EPS of $2.28, mostly in-line with consensus estimates.
D.A. Davidson analyst Andrew Burns isn’t quite as optimistic about Nike’s third-quarter numbers, but he still likes the stock in the long term. Burns is expecting Nike to report EPS of 49 cents on revenue of $8.82 billion.
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“With the U.S. segment positioned to positively inflect, [direct-to-consumer] strength and a robust product pipeline, NKE is well positioned to deliver on its October 2017 analyst day growth ambitions,” Burns says. He says foreign exchange headwinds should subside for Nike in fiscal 2019 and margins pressure from excess inventory should ease.
“While management is unlikely to provide specific [fiscal 2019] guidance, we expect initial commentary to be in line with current expectations,” Burns says.
D.A. Davidson has a “buy” rating and $78 price target for Nike. Buckingham has a “buy” rating and $75 target for NKE stock.
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North America Is the Key for Nike Inc (NKE) Earnings originally appeared on usnews.com
