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NIKE Q4 Earnings Preview: 8th Consecutive EPS Beat in Store?

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The first quarter of 2022 was one for the books and one that many investors undoubtedly want to forget about. Primarily, we witnessed deep valuation slashes following many companies’ quarterly reports due to margin compression, geopolitical issues, and of course, a hawkish Fed.

It’s in the rear-view mirror, but the second round of quarterly reports for 2022 is quickly approaching.  

One company, NIKE (NKE - Free Report) , will release 2022 Q4 results on Monday after the bell rings.

NIKE is the global leader in athletic footwear, apparel, equipment, and sports-related accessories, with operations in over 160 countries. With the help of a strong brand portfolio, including Nike Pro, Nike Golf, Nike+, and Air Jordan, the company offers premium, well-designed, and high-quality products in line with the latest customer trends.

Let’s examine how the company shapes up heading into the quarterly report.

Share Performance  

Year-to-date, it’s been a rough stretch for NIKE shares, although that is the theme for most companies throughout 2022. NIKE shares have lost more than 30% in value, extensively underperforming the S&P 500.

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Upon extending the timeframe, the story remains the same. NIKE shares have struggled over the last year, with a strong downtrend beginning near late 2021 and vastly underperforming the S&P 500.

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Image Source: Zacks Investment Research


Heading into the quarterly report, NIKE is a Zacks Rank #4 (Sell) with an overall VGM Score of a D. Additionally, the company has an Earnings ESP Score of -1.6%.

Generally, stocks with a positive Earnings ESP Score paired with a Zacks Rank #3 (Hold) or higher have increased odds of recording an EPS beat. However, NIKE currently does not fit within those parameters.


NIKE currently has a 24.3X forward earnings multiple, which appears slightly pricey. However, the current value is nowhere near 2020 highs of 54.4X and well below its five-year median of 32.4X. Furthermore, the value represents a rich 43% premium relative to the S&P 500’s value of 16.9X.

NIKE has a Style Score of a D for Value.

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Previous Quarterly Results

The company has continuously posted strong bottom-line results, exceeding bottom-line expectations nine times out of its last ten quarterly reports – undoubtedly a major positive that bodes well for the company heading into Monday.

Over its last four quarters, NIKE has beat EPS estimates by an average of 34%, and in its latest quarter, the company exceeded bottom-line estimates by a notable 20%.

The top line has primarily displayed strength as well, with NIKE beating top-line estimates in seven of its last ten quarters. Additionally, in its latest quarter, NIKE beat the $10.6 billion revenue estimate handily by 2.5% and reported quarterly sales of $10.8 billion.

Growth Estimates

NIKE is estimated to rake in $12.1 billion for the quarter, a marginal 2.1% decrease in revenue from year-ago quarterly sales of $12.3 billion. However, for the full fiscal year, the top-line is forecasted to expand a notable 4.6%, with annual sales estimated at $46.6 billion.

Pivoting to bottom-line projections, the $0.81 per share quarterly estimate reflects a mildly concerning 13% decrease in earnings from the year-ago quarterly EPS figure of $0.93. Additionally, analysts have been significantly lowering their outlook for the quarter over the last 60 days, causing the Consensus Estimate Trend to retrace 5.8%.

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Bottom Line

Overall, the strong, consistent bottom-line performance bodes well for the company heading into the quarterly release. However, carrying a Zacks Rank #4 (Sell) with a negative Earnings ESP Score indicates that the company may struggle to exceed EPS estimates – something that investors should be aware of.

Additionally, valuation levels appear pricey as well, another reason I believe that investors should heed caution and deploy a defense-first approach when considering the stock.

For investors seeking exposure to the industry that NIKE operates within, a great bet would be Caleres, Inc. (CAL - Free Report) . The company is a Zacks Rank #1 (Strong Buy), and analysts have been upping their earnings estimates across nearly all timeframes over the last 60 days.

Caleres is a footwear retailer and wholesaler. The company is involved in the operation of retail shoe stores and e-commerce Websites, as well as the design, sourcing, and marketing of footwear for women and men.

Year-to-date, CAL shares are up nearly 26%, easily crushing the S&P 500’s decline of approximately 20%.

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Image Source: Zacks Investment Research

In addition to a very favorable Zacks Rank, the company also carries a Style Score of an A for Value. CAL’s 6.2X forward earnings multiple is very enticing and represents an attractive 64% discount relative to the S&P 500’s value.

For the upcoming quarter, the Consensus Estimate Trend has climbed 27%, reflecting quarterly EPS of $1.32 and penciling in a strong 11% growth in earnings from the year-ago quarter.

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