Nike is confirmed to report earnings at approximately 4:15 PM ET on
Thursday, June 24, 2021.
NIKE has been benefiting from robust growth in the digital and direct
businesses, lower operating expenses, and improved margins. Amid the
coronavirus crisis, digital portals have quickly gained prominence, becoming
the primary channel to engage and serve customers. NIKE benefited from this
shift, thanks to its efficient digital ecosystem that comprises its online site
as well as commercial and activity apps.
The Major Catalysts for
consensus earnings estimate is for $0.51 per share on revenue of $11.09 billion;
but the Whisper number is higher at $0.64 per share.
estimates are for year-over-year earnings growth of 200.00% with revenue
increasing by 75.67%.
earnings estimates have been revised higher since the company's last earnings
release. Nike has an Earnings ESP of +8.83% at the moment, suggesting that
analysts have grown bullish on its near-term earnings potential.
In its last
earnings report, Nike disappointed investors who were looking for evidence of a
powerful growth rebound. Instead, sales dropped 10% in the core U.S. market and
only edged up by 3% worldwide.
said that the early 2021 stumble was due to supply chain challenges, which
means there should be much better news in Nike's upcoming report.
ingredients are in place for Nike to announce a head-turning growth figure on
Thursday. Sales a year ago were depressed by COVID-19 shutdowns, for one. Nike
also said a significant portion of its sales last quarter were pushed into the
next quarter because of shipping delays.
has been witnessing robust digital sales growth across all regions for the past
few months. In the fiscal third quarter, digital sales for the NIKE brand
witnessed double-digit growth across North America, Greater China and APLA along
with triple-digit growth in EMEA.
stores reopen, the company continues to witness strong digital trends, which
demonstrate the strength of its brands and investments made over the past
several years to improve digital consumer experiences. The persistence of the
digital shopping momentum is likely to have contributed meaningfully to its
sales in the fourth quarter of fiscal 2021.
higher full-price product margins, owing to the geographic mix and favorable
digital mix, have been aiding gross margin. Also, lower SG&A expenses due
to tight operating expense management as well as effective marketing spending
are likely to have aided the bottom line in the fiscal fourth quarter.
industry peers have painted an encouraging picture of the market as we approach
the summer selling season. Foot Locker credited Nike brands for helping deliver
an 80% sales spike in the first quarter. lululemon athletica (NASDAQ:LULU)
doubled its revenue year over year as consumers enthusiastically shelled out
for athleisure wear.
All of this
good news has investors expecting Nike to report a nearly 80% sales increase to
$11.1 billion. Hitting that target would put the company back into record
territory following the pandemic year. Sales in the same fiscal quarter of 2019
were $10.2 billion.
Stanley raised their stock price forecast on Nike to $185 from $172 and said
near-term headwinds well flagged but long-term story intact.
“Revenue is a well-understood risk
in 4Q, & our predictive model’s outlook has improved. Our online discount
tracker suggests GM upside, & SG&A guidance appears conservative, which
could drive an EPS beat. ST risk appears priced in per YTD underperformance.
Stay OW & raise price target to $185 on lower WACC,” noted Kimberly Greenberger, equity
analyst at Morgan Stanley.
“NKE is in the early innings of
transition from a wholesaler to a DTC brand. Success would make it one of few
to benefit from the shift to eComm (~15% of ‘20 sales). Its DTC business (~33% of
‘20 sales) should ignite its next phase of margin-accretive revenue growth,
driving a 29% 5Y EPS CAGR. NKE also stands to benefit from advancing global
consumer activewear demand (due to the WFH-induced preference for
comfort-oriented apparel/footwear and increased focus on health &
wellness). NKE’s strategic portfolio decisions, tech investments, and supply
chain innovation also create LT competitive advantages, and are further
supported by an industry-leading balance sheet.”
Stanley raised the stock price forecast to $185 from $172 with a high of $354
under a bull scenario and $97 under the worst-case scenario. The firm gave an
“Overweight” rating on the footwear company’s stock.
analysts who offered stock ratings for Nike in the last three months forecast
the average price in 12 months of $166.94 with a high forecast of $192.00 and a
low forecast of $140.00.
price target represents 28.02% from the last price of $130.40. Of those 18
analysts, 15 rated “Buy”, two rated “Hold” while one rated “Sell.”