Leading sportswear retailer and a sponsor of the 2014 FIFA World Cup, Nike Inc. (NKE - Free Report) is slated to report its fourth-quarter fiscal 2014 results after the market closes on Jun 26, 2014. In the last quarter, it posted a positive surprise of 4.11%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
Nike has been posting solid quarterly results benefiting from its focus on innovation, to keep up with customer demand. In spite of macroeconomic headwinds, the company’s results remain impressive, backed by its continuous practice of exploiting growth opportunities along with risk management. Going forward, Nike plans to continue on the same path to enhance shareholder value in the long run.
While currency headwinds keep on affecting the company’s bottom lines, the company projects a strong top line, reflecting a high single-digit growth for the fourth quarter. Additionally, we believe the company’s top line will gain from the increased advertising related to the FIFA World Cup held in Brazil. Moreover, with the soccer World Cup in full swing athletic footwear sales have improved this summer. The company should also gain from the recent launch of a new Android app for its FuelBand activity tracker as well as from the appointment of Reenie Benziger as VP of its global apparel business.
Our proven model does not conclusively show that Nike is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, #2 or #3 to surpass earnings estimates. However, this is not the case here, as you will see below:
Zacks ESP: ESP (Expected Surprise Prediction) for Nike is 0.00%. This is because the Most Accurate estimate stands at 76 cents per share, which is in line with the Zacks Consensus Estimate.
Zacks Rank #3 (Hold): Nike’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
Other Stocks to Consider
Here are some companies you may want to consider as our model shows they have the right combination to post an earnings beat:
Monsanto Company (MON - Free Report) has an Earnings ESP of +7.10% and a Zacks Rank #3.
Apollo Education Group Inc. with an Earnings ESP of +3.08% carries a Zacks Rank #3.
Lindsay Corporation (LNN - Free Report) holds an Earnings ESP of +0.72% and a Zacks Rank #3.