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NIKE's (NKE) Digital & Growth Strategies Seem Encouraging
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NIKE Inc. (NKE - Free Report) appears an encouraging pick now, thanks to its digital endeavors and other robust strategies including the continued progress on Consumer Direct Acceleration strategy. The company is gaining from robust retail sales across Nike Direct. NKE also continued to benefit from its business strategy, compelling product innovation and digital leadership.
Undoubtedly, management is focused on creating a trend-right merchandise assortment, deepening relations with customers via marketing, enhancing the digital commerce agenda and efficiently controlling expenses.
Buoyed by such strengths, shares of this athletic footwear dealer have increased 13.6% compared with the industry’s 9.5% growth in the six-month time frame. A Growth Score of 3 further adds strength to this current Zacks Rank #3 (Hold) company.
Let’s Delve Deeper
NIKE is benefiting from its efficient digital ecosystem, which comprises its online site as well as commercial and activity apps. The company’s digital business has been gaining from underlying consumer trends, including sustained momentum in the NIKE mobile app led by improved traffic and increasing member buying frequency. In the fiscal second quarter, the NIKE Brand’s Digital revenues improved 4% on a reported basis and 1% on a currency-neutral basis. Notably, the company has increased the digital share of its business to 26% in fiscal 2023 compared with 10% in fiscal 2019.
Effective inventory management strategies have been a critical component of NIKE's success. The company’s adept inventory management has a direct impact on its financial performance. This was well demonstrated by the company’s second-quarter fiscal 2024 performance, which gained mainly from the company’s return healthy inventory position. The NIKE inventory and total marketplace inventory were healthy at the end of the quarter. The company’s inventory dollars were down 14% year over year at the end of the fiscal second quarter.
The company is benefiting from a solid consumer momentum, a robust product innovation pipeline and a strong inventory. Looking ahead, the company expects strong gross margin execution and disciplined cost management to offset soft second-half revenues and drive earnings growth. For the fiscal year, NKE expects revenues to grow 1% year over year. The fiscal 2024 gross margin is envisioned to expand 140-160 basis points (bps) on a reported basis. The gross margin guidance reflects gains from strategic price increases, lower ocean freight rates and supply-chain efficiency.
NIKE estimates revenues to be up in the low-single digits for the fiscal fourth quarter. The company expects the gross margin to expand 160-180 bps for the fiscal third quarter and 225-250 bps for the fiscal fourth quarter. It has been identifying opportunities to deliver up to $2 billion as cumulative cost-savings in the next three years.
Analysts also seem quite optimistic about this current Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for fiscal 2024 sales and earnings per share (EPS) is currently pegged at $51.8 billion and $3.55, respectively. These estimates show corresponding growth of 1.1% and 9.9% year over year. The consensus mark for the next fiscal year’s sales and EPS is $55.3 billion and $4.20, respectively, reflecting a year-over-year increase of 6.8% and 18.3%.
Given all the positives, NIKE stock seems to deserve a place in your investment portfolio.
GIII Apparel has a trailing four-quarter earnings surprise of 541.8%, on average. The Zacks Consensus Estimate for GIII’s fiscal 2024 EPS indicates an increase of 33% from the year-ago period’s reported level.
Crocs carries a Zacks Rank #2 (Buy), at present. CROX has a trailing four-quarter earnings surprise of 17.4%, on average.
The Zacks Consensus Estimate for Crocs’ 2023 sales and EPS indicates increases of 11.4% and 8.6%, respectively, from the year-ago period’s reported levels.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank of 2, at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 18.2% and 22.8%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 9.2%, on average.
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NIKE's (NKE) Digital & Growth Strategies Seem Encouraging
NIKE Inc. (NKE - Free Report) appears an encouraging pick now, thanks to its digital endeavors and other robust strategies including the continued progress on Consumer Direct Acceleration strategy. The company is gaining from robust retail sales across Nike Direct. NKE also continued to benefit from its business strategy, compelling product innovation and digital leadership.
Undoubtedly, management is focused on creating a trend-right merchandise assortment, deepening relations with customers via marketing, enhancing the digital commerce agenda and efficiently controlling expenses.
Buoyed by such strengths, shares of this athletic footwear dealer have increased 13.6% compared with the industry’s 9.5% growth in the six-month time frame. A Growth Score of 3 further adds strength to this current Zacks Rank #3 (Hold) company.
Let’s Delve Deeper
NIKE is benefiting from its efficient digital ecosystem, which comprises its online site as well as commercial and activity apps. The company’s digital business has been gaining from underlying consumer trends, including sustained momentum in the NIKE mobile app led by improved traffic and increasing member buying frequency. In the fiscal second quarter, the NIKE Brand’s Digital revenues improved 4% on a reported basis and 1% on a currency-neutral basis. Notably, the company has increased the digital share of its business to 26% in fiscal 2023 compared with 10% in fiscal 2019.
Effective inventory management strategies have been a critical component of NIKE's success. The company’s adept inventory management has a direct impact on its financial performance. This was well demonstrated by the company’s second-quarter fiscal 2024 performance, which gained mainly from the company’s return healthy inventory position. The NIKE inventory and total marketplace inventory were healthy at the end of the quarter. The company’s inventory dollars were down 14% year over year at the end of the fiscal second quarter.
NIKE, Inc. Price and Consensus
NIKE, Inc. price-consensus-chart | NIKE, Inc. Quote
The company is benefiting from a solid consumer momentum, a robust product innovation pipeline and a strong inventory. Looking ahead, the company expects strong gross margin execution and disciplined cost management to offset soft second-half revenues and drive earnings growth. For the fiscal year, NKE expects revenues to grow 1% year over year. The fiscal 2024 gross margin is envisioned to expand 140-160 basis points (bps) on a reported basis. The gross margin guidance reflects gains from strategic price increases, lower ocean freight rates and supply-chain efficiency.
NIKE estimates revenues to be up in the low-single digits for the fiscal fourth quarter. The company expects the gross margin to expand 160-180 bps for the fiscal third quarter and 225-250 bps for the fiscal fourth quarter. It has been identifying opportunities to deliver up to $2 billion as cumulative cost-savings in the next three years.
Analysts also seem quite optimistic about this current Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for fiscal 2024 sales and earnings per share (EPS) is currently pegged at $51.8 billion and $3.55, respectively. These estimates show corresponding growth of 1.1% and 9.9% year over year. The consensus mark for the next fiscal year’s sales and EPS is $55.3 billion and $4.20, respectively, reflecting a year-over-year increase of 6.8% and 18.3%.
Given all the positives, NIKE stock seems to deserve a place in your investment portfolio.
Key Consumer Discretionary Picks
Some better-ranked companies are G-III Apparel Group (GIII - Free Report) , Crocs (CROX - Free Report) and lululemon athletica (LULU - Free Report) .
G-III Apparel sports a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
GIII Apparel has a trailing four-quarter earnings surprise of 541.8%, on average. The Zacks Consensus Estimate for GIII’s fiscal 2024 EPS indicates an increase of 33% from the year-ago period’s reported level.
Crocs carries a Zacks Rank #2 (Buy), at present. CROX has a trailing four-quarter earnings surprise of 17.4%, on average.
The Zacks Consensus Estimate for Crocs’ 2023 sales and EPS indicates increases of 11.4% and 8.6%, respectively, from the year-ago period’s reported levels.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank of 2, at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 18.2% and 22.8%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 9.2%, on average.