Nike Inc (NYSE:NKE) plans to release its third quarter fiscal 2014 financial results on Thursday, March 20, 2014, at approximately 1:15 p.m. PT, following the close of regular stock market trading hours. Following the news release, NIKE management will host a conference call beginning at 2:00 p.m. PT to review results.
Wall Street anticipates that the athletic apparel maker will earn $0.72 per share for the quarter, which is $0.01 less than last year's profit of $0.73 per share. iStock expects NKE to beat Wall Street's consensus number. The iEstimate is $0.75, a bullish surprise of $0.03.
[Related -Lululemon Athletica inc. (LULU): Near-Term Risks Could Further Derail Investor Confidence]
Although earnings are expected to dip ever so slightly, Nike's revenue is expected to rise 8.10%. The consensus sales estimate for Q3 is $6.69 billion, up from last year's $6.19 billion.
Like you don't know, but the Just Do It company is engaged in the design, development and worldwide marketing and selling of footwear, apparel, equipment, accessories and services. NIKE is a seller of athletic footwear and athletic apparel worldwide. The Company focuses its product offerings in seven key categories: Running, Basketball, Football (Soccer), Men's Training, Women's Training, NIKE Sportswear (its sports-inspired products) and Action Sports.
The Dow Jones Index member has run past Wall Street's EPS expectations 10 of the last 12 quarterly checkups. On average, the bullish surprises averaged 7.69% more than forecasted with a range of 1.72% to 14% better than the consensus estimate. Meanwhile, the pair of bearish misses fell short by -14.6% and -3.57%.
[Related -Nike Inc. (NYSE:NKE) Q2 Earnings Preview: Just Doing It, Again]
Despite the solid record of positive beats, NKE's earnings-driven price-sensitivity hasn't been as lopsided. In the last three years, seven announcements helped shares find higher ground, gaining anywhere from 1.45% to 8.57% with an average run of 4.74%.
That leaves a handful of stumbles where the stock backpedaled from -0.61% to -10.53%. The typical loss was -3.56% - manageable.
Strength in North America (NA) helped Nike in Q2, but this quarter Europe could add a big boost to the top and bottom lines in Q3.
According to ValueWalk, "We conducted a survey of 185 independent Nike retailers in Europe on their sales trends during Nike Inc (NYSE:NKE)'s FYQ3'14 (ending Feb '14) & upcoming expectations… We expect re-acceleration in W.Europe & stabilization in China to help mitigate potential slowdowns in N.America (cont'd growth, but comping 3yrs of +DD revs) and EM… Based on our survey results, average footwear sales for our respondents increased +3.6% y/y, while athletic apparel grew +2% y/y during FYQ3 (Dec – Feb)… retailers across the 5 countries we surveyed identified Nike as their top-selling brand, followed closely by Adidas AG (ADR)."
ValueWalk also expects China to stabilize. Ah, we aren't so sure about that one.
If North America remains strong, which is in doubt thanks to inclement weather for most of the polar-vortexed country, then the 1-2 Euro-American punch could lead to a bullish revenue surprise.
To get a sense of what to expect from the USA, iStock turned to Google Trends for the keyword "NIKE". The first thing we noticed is search volume intensity (SVI) is at an all-time high right now, which could be a plus for forward guidance.
Getting back to Q3, SVI for "NIKE" is up 12.3%. Add that to improving EU trends and a potentially stable China, and confidence for a bullish top-line surprise jog higher. More revenue than expected should lead to more earnings than anticipated.
We input some numbers into an excel spreadsheet, did some math, and modeled sales of $6.842 billion in sales for Nike's third quarter. Using Wall Street's forecasted net-margin of 9.53%, iStock arrives at EPS of $0.74; a penny below the iEstimate, but still two cents better than the current consensus.
Overall: Better sales, better earnings, and upbeat guidance should mean Nike Inc's (NYSE:NKE) enjoy a nice run following Thursday's profit review.
No comments:
Post a Comment