We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
What's Next for Nike Stock & Why Lululemon (LULU) is a Buy Before Q4 Earnings
Read MoreHide Full Article
Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains breaks down Nike’s (NKE - Free Report) Q3 fiscal 2019 financial results that led to a small selloff on the back of lower-than-expected sales in a key business. The episode then dives into what to expect from Lululemon’s (LULU - Free Report) Q4 earnings.
Nike posted earnings of $0.68 a share last Thursday to top our $0.63 per share Zacks Consensus Estimate by 8%. But sometimes earnings beats aren’t enough to impress investors, especially for Nike which has a stellar history of bottom-line beats. With that said, the sportswear giant also saw its revenue jump 7% to reach $9.611 billion and surpass our estimate.
Shares of Nike likely slipped over 6% on Friday because the company underperformed Wall Street estimates for its always-vital North American unit. Nike’s sales in North America, which account for roughly 40% of total sales, popped 7%. However, Nike’s revenue in its home market fell just short of Wall Street expectations and marked a slowdown from Q2’s expansion. Despite the small miss, Nike proved its strength in the region as it continues to fight off rival Adidas (ADDYY - Free Report) and blow away Under Armour UAA.
Meanwhile, Nike’s sales in China climbed by double-digits for the 19th straight quarter. The Oregon-based company’s sales in the world’s second-largest economy did come down from previous periods, but looked far stronger than the likes of Apple (AAPL - Free Report) , Alibaba BABA, and many others in the region.
On top of that, Nike’s footwear sales popped 9% and its women’s business grew. And maybe most importantly, Nike’s direct-to-consumer unit expanded as it rolls out more digital and e-commerce offerings, along with new brick-and-mortar concepts. At a time when brands are built and people shop directly on Instagram , Nike’s reach looks as strong as ever. Meanwhile, Nike maintains relationships with Nordstrom (JWN - Free Report) , Foot Locker (FL - Free Report) , and Dick’s Sporting Goods (DKS - Free Report) .
Moving on, Lululemon has forced Nike and others to deepen their athleisure offerings. Along with the Canadian-based company’s original yoga-inspired clothing, Lulu now sells men’s and women’s outwear for as much $600 as it tries to compete against Canada Goose GOOS, V.F. Corporation’s (VFC - Free Report) The North Face, Columbia Sportswear (COLM - Free Report) , and other higher-end brands. Lululemon has also expanded into shoes, accessories, as well as more work-appropriate and fashion-focused offerings for both men and women.
Lululemon's bigger push into menswear comes as Gap (GPS - Free Report) and other firms such as Austin, Texas’ Outdoor Voices grow. Earlier this month, Lululemon signed NFL quarterback Nick Foles as its first men’s ambassador in an effort to attract consumers away from more traditional sportswear brands. Lululemon is also testing out a new loyalty program as retailers try to navigate the Amazon (AMZN - Free Report) age.
Looking ahead, Lululemon’s Q4 revenues are projected to jump 23.7% to reach $1.15 billion, which would top Q3’s 21% top-line growth. Lululemon is also currently a Zacks Rank #2 (Buy) based, in part, on its recent earnings estimate revision activity heading into its fourth-quarter earnings release, which is due out after the closing bell on Wednesday, March 27.
As a reminder, if you feel that we missed something, or if you have any topic suggestions, shoot us an email at podcast@zacks.com. Make sure to check out all of our other audio content at zacks.com/podcasts, and remember to subscribe and leave us a rating wherever you listen to your podcasts.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
Image: Bigstock
What's Next for Nike Stock & Why Lululemon (LULU) is a Buy Before Q4 Earnings
Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains breaks down Nike’s (NKE - Free Report) Q3 fiscal 2019 financial results that led to a small selloff on the back of lower-than-expected sales in a key business. The episode then dives into what to expect from Lululemon’s (LULU - Free Report) Q4 earnings.
Nike posted earnings of $0.68 a share last Thursday to top our $0.63 per share Zacks Consensus Estimate by 8%. But sometimes earnings beats aren’t enough to impress investors, especially for Nike which has a stellar history of bottom-line beats. With that said, the sportswear giant also saw its revenue jump 7% to reach $9.611 billion and surpass our estimate.
Shares of Nike likely slipped over 6% on Friday because the company underperformed Wall Street estimates for its always-vital North American unit. Nike’s sales in North America, which account for roughly 40% of total sales, popped 7%. However, Nike’s revenue in its home market fell just short of Wall Street expectations and marked a slowdown from Q2’s expansion. Despite the small miss, Nike proved its strength in the region as it continues to fight off rival Adidas (ADDYY - Free Report) and blow away Under Armour UAA.
Meanwhile, Nike’s sales in China climbed by double-digits for the 19th straight quarter. The Oregon-based company’s sales in the world’s second-largest economy did come down from previous periods, but looked far stronger than the likes of Apple (AAPL - Free Report) , Alibaba BABA, and many others in the region.
On top of that, Nike’s footwear sales popped 9% and its women’s business grew. And maybe most importantly, Nike’s direct-to-consumer unit expanded as it rolls out more digital and e-commerce offerings, along with new brick-and-mortar concepts. At a time when brands are built and people shop directly on Instagram , Nike’s reach looks as strong as ever. Meanwhile, Nike maintains relationships with Nordstrom (JWN - Free Report) , Foot Locker (FL - Free Report) , and Dick’s Sporting Goods (DKS - Free Report) .
Moving on, Lululemon has forced Nike and others to deepen their athleisure offerings. Along with the Canadian-based company’s original yoga-inspired clothing, Lulu now sells men’s and women’s outwear for as much $600 as it tries to compete against Canada Goose GOOS, V.F. Corporation’s (VFC - Free Report) The North Face, Columbia Sportswear (COLM - Free Report) , and other higher-end brands. Lululemon has also expanded into shoes, accessories, as well as more work-appropriate and fashion-focused offerings for both men and women.
Lululemon's bigger push into menswear comes as Gap (GPS - Free Report) and other firms such as Austin, Texas’ Outdoor Voices grow. Earlier this month, Lululemon signed NFL quarterback Nick Foles as its first men’s ambassador in an effort to attract consumers away from more traditional sportswear brands. Lululemon is also testing out a new loyalty program as retailers try to navigate the Amazon (AMZN - Free Report) age.
Looking ahead, Lululemon’s Q4 revenues are projected to jump 23.7% to reach $1.15 billion, which would top Q3’s 21% top-line growth. Lululemon is also currently a Zacks Rank #2 (Buy) based, in part, on its recent earnings estimate revision activity heading into its fourth-quarter earnings release, which is due out after the closing bell on Wednesday, March 27.
As a reminder, if you feel that we missed something, or if you have any topic suggestions, shoot us an email at podcast@zacks.com. Make sure to check out all of our other audio content at zacks.com/podcasts, and remember to subscribe and leave us a rating wherever you listen to your podcasts.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>