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Here's How NIKE (NKE) Looks Just Ahead of Q3 Earnings Report
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NIKE Inc. (NKE - Free Report) is slated to release third-quarter fiscal 2022 results on Mar 21. The leading sports apparel retailer is likely to have witnessed sales growth in the fiscal third quarter. The company has been seeing strength in NIKE Direct sales, led by the return of traffic to stores and digital momentum.
The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $10.61 billion, suggesting 2.5% growth from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for the company’s earnings for the fiscal third quarter is pegged at 73 cents per share, suggesting a decline of 18.9% from the year-ago reported number. Earnings estimates for the fiscal third quarter have moved up by a penny in the past 30 days.
In the last reported quarter, the company delivered an earnings surprise of 31.8%. Its bottom line beat the consensus estimate by 34.4%, on average, over the trailing four quarters.
Key Factors to Note
NIKE’s third-quarter fiscal 2022 revenues are likely to have benefited from the return of sports activity, the reopening of stores and continued growth of NIKE Digital due to the shift toward digital, and health & wellness. Its product innovation, brand strength and scale of operations have been driving digital sales growth.
The NIKE Direct business has been benefiting from robust growth in North America Direct, driven by steady normalization of the owned retail business and continued momentum in the digital business. Revenues at NIKE-owned stores are expected to have gained from improved traffic and higher conversion rates.
On its last reported quarter’s earnings call, management noted that traffic trends began to move toward the pre-pandemic levels. The company expected fiscal 2022 revenues to benefit from robust digital growth, indicating that digital sales growth has persisted in the fiscal third quarter.
Additionally, improved NIKE Direct margins, driven by lower markdowns and higher full-price sales mix, have been aiding the gross margin, even though the headwinds related to escalated freight and logistics costs have persisted.
On its last reported quarter’s earnings call, the company anticipated the robust demand environment against the lean inventory scenario across the market to aid the gross margin. Increased full-price realization, which is likely to be above the long-term target due to lower channel markdowns, is also expected to have boosted the gross margin.
However, supply-chain challenges and a volatile operating environment due to business disruptions caused by the COVID-19 variants cannot be ignored. These headwinds are likely to have persisted in the fiscal third quarter, weighing on the bottom line.
On its last reported quarter’s earnings call, the company anticipated higher product costs in the second half of fiscal 2022 due to higher macro input costs. This is expected to have partly hurt gross margin growth.
The company also expected supply-chain costs to remain elevated due to higher impacts in the second half of fiscal 2022. For the fiscal third quarter, the company expected year-over-year revenue growth in the low-single digits due to the continued impacts of lost production from the COVID-related disruptions in Vietnam. NKE also expects inventory supply to significantly lag consumer demand throughout fiscal 2022 across NIKE’s brands.
Our proven model does not conclusively predict an earnings beat for NIKE this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
NIKE has a Zacks Rank #3 and an Earnings ESP of -0.74%.
Stocks Poised to Beat Earnings Estimates
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Oxford Industries (OXM - Free Report) currently has an Earnings ESP of +1.23% and a Zacks Rank of 2. The company is expected to register top and bottom-line growth when it reports fourth-quarter 2021 numbers. The Zacks Consensus Estimate for OXM’s quarterly revenues is pegged at $295.1 million, which suggests growth of 33.3% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for Oxford Industries’ quarterly earnings moved up by a penny in the last 30 days to $1.36 per share, suggesting 946.2% growth from the year-ago reported number. OXM has delivered an earnings beat of 310.3%, on average, in the trailing four quarters.
Whirlpool (WHR - Free Report) currently has an Earnings ESP of +7.36% and a Zacks Rank #2. WHR is anticipated to register top-line growth when it reports first-quarter 2022 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $5.45 billion, indicating an improvement of 1.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Whirlpool’s bottom line of $5.30 per share has moved down 0.4% in the past 30 days. The consensus estimate suggests a decline of 26.4% from $7.20 reported in the year-ago quarter. WHR has delivered an earnings beat of 14.9%, on average, in the trailing four quarters.
Trip.com Group Limited (TCOM - Free Report) currently has an Earnings ESP of +5.88% and a Zacks Rank #3. TCOM is likely to register top and bottom-line decline when it reports fourth-quarter 2021 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $670.8 million, suggesting an 11.9% decline from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Trip.com’s quarterly loss of 9 cents suggests a 133.3% decline from earnings of 27 cents reported in the year-ago quarter. However, the consensus mark has narrowed in the past 30 days from a loss of 16 cents stated earlier.
Image: Bigstock
Here's How NIKE (NKE) Looks Just Ahead of Q3 Earnings Report
NIKE Inc. (NKE - Free Report) is slated to release third-quarter fiscal 2022 results on Mar 21. The leading sports apparel retailer is likely to have witnessed sales growth in the fiscal third quarter. The company has been seeing strength in NIKE Direct sales, led by the return of traffic to stores and digital momentum.
The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $10.61 billion, suggesting 2.5% growth from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for the company’s earnings for the fiscal third quarter is pegged at 73 cents per share, suggesting a decline of 18.9% from the year-ago reported number. Earnings estimates for the fiscal third quarter have moved up by a penny in the past 30 days.
In the last reported quarter, the company delivered an earnings surprise of 31.8%. Its bottom line beat the consensus estimate by 34.4%, on average, over the trailing four quarters.
Key Factors to Note
NIKE’s third-quarter fiscal 2022 revenues are likely to have benefited from the return of sports activity, the reopening of stores and continued growth of NIKE Digital due to the shift toward digital, and health & wellness. Its product innovation, brand strength and scale of operations have been driving digital sales growth.
The NIKE Direct business has been benefiting from robust growth in North America Direct, driven by steady normalization of the owned retail business and continued momentum in the digital business. Revenues at NIKE-owned stores are expected to have gained from improved traffic and higher conversion rates.
On its last reported quarter’s earnings call, management noted that traffic trends began to move toward the pre-pandemic levels. The company expected fiscal 2022 revenues to benefit from robust digital growth, indicating that digital sales growth has persisted in the fiscal third quarter.
Additionally, improved NIKE Direct margins, driven by lower markdowns and higher full-price sales mix, have been aiding the gross margin, even though the headwinds related to escalated freight and logistics costs have persisted.
On its last reported quarter’s earnings call, the company anticipated the robust demand environment against the lean inventory scenario across the market to aid the gross margin. Increased full-price realization, which is likely to be above the long-term target due to lower channel markdowns, is also expected to have boosted the gross margin.
However, supply-chain challenges and a volatile operating environment due to business disruptions caused by the COVID-19 variants cannot be ignored. These headwinds are likely to have persisted in the fiscal third quarter, weighing on the bottom line.
On its last reported quarter’s earnings call, the company anticipated higher product costs in the second half of fiscal 2022 due to higher macro input costs. This is expected to have partly hurt gross margin growth.
The company also expected supply-chain costs to remain elevated due to higher impacts in the second half of fiscal 2022. For the fiscal third quarter, the company expected year-over-year revenue growth in the low-single digits due to the continued impacts of lost production from the COVID-related disruptions in Vietnam. NKE also expects inventory supply to significantly lag consumer demand throughout fiscal 2022 across NIKE’s brands.
NIKE, Inc. Price and EPS Surprise
NIKE, Inc. price-eps-surprise | NIKE, Inc. Quote
Zacks Model
Our proven model does not conclusively predict an earnings beat for NIKE this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
NIKE has a Zacks Rank #3 and an Earnings ESP of -0.74%.
Stocks Poised to Beat Earnings Estimates
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Oxford Industries (OXM - Free Report) currently has an Earnings ESP of +1.23% and a Zacks Rank of 2. The company is expected to register top and bottom-line growth when it reports fourth-quarter 2021 numbers. The Zacks Consensus Estimate for OXM’s quarterly revenues is pegged at $295.1 million, which suggests growth of 33.3% from the prior-year quarter’s reported figure.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Oxford Industries’ quarterly earnings moved up by a penny in the last 30 days to $1.36 per share, suggesting 946.2% growth from the year-ago reported number. OXM has delivered an earnings beat of 310.3%, on average, in the trailing four quarters.
Whirlpool (WHR - Free Report) currently has an Earnings ESP of +7.36% and a Zacks Rank #2. WHR is anticipated to register top-line growth when it reports first-quarter 2022 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $5.45 billion, indicating an improvement of 1.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Whirlpool’s bottom line of $5.30 per share has moved down 0.4% in the past 30 days. The consensus estimate suggests a decline of 26.4% from $7.20 reported in the year-ago quarter. WHR has delivered an earnings beat of 14.9%, on average, in the trailing four quarters.
Trip.com Group Limited (TCOM - Free Report) currently has an Earnings ESP of +5.88% and a Zacks Rank #3. TCOM is likely to register top and bottom-line decline when it reports fourth-quarter 2021 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $670.8 million, suggesting an 11.9% decline from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Trip.com’s quarterly loss of 9 cents suggests a 133.3% decline from earnings of 27 cents reported in the year-ago quarter. However, the consensus mark has narrowed in the past 30 days from a loss of 16 cents stated earlier.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.