Photo Credit: Josh Hallett
Nike Inc (NKE) Consumer Discretionary – Textiles, Apparel & Luxury Goods | Reports March 22, After Market Closes
Key Takeaways
Despite a weak holiday season, Nike is coming into its fiscal third quarter with high expectations. The Estimize community is looking for EPS of $0.50 and revenue of $8.20 billion, 2 cents higher than Wall Street on the bottom-line, and right in line on the top. However, our Select Consensus, which more heavily weights historically accurate analysts and recent estimates, is expecting a beat of $15 million in sales. Nike is seeing adverse revisions activity lately with earnings estimates falling 8% in the past three months. Still, the footwear company is predicted to see favorable year-over-year earnings growth of 12% and sales growth of 10%.
Just ahead of its FQ3 2016 report, Nike introduced the first-ever power lacing sneaker, an ode to Marty Mcfly in Back to the Future. Nike’s creative and innovative prowess has been leaps and bounds ahead of the competition in recent years, solidifying its staunch market position in the footwear industry. In the past 12 months the footwear giant has rode 4 consecutive earnings beats to a 29.6% increase in share price.
Like most retailers, Nike’s growth strategy has focused on developing its digital and ecommerce channels. In the first half of this fiscal year, digital sales grew 48% YoY on a constant currency basis. Online sales have also driven growth in Nike’s key Direct to Consumer segment. At its current pace, Nike is expecting digital revenue to reach $7 billion on $50 billion of total revenue by 2020. The company is also investing in 3D printing, with the goal of allowing customers to one day print sneakers from home.
