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NIKE (NKE) Focuses on Strategic Growth: Should You Hold?
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NIKE, Inc. (NKE - Free Report) , a leading footwear and athletic apparel retailer, continues to seek opportunities for expanding its global footprint, popularity and market share.
Nike has been increasing its popularity by acquiring contracts to supply sports-related apparel, shoes and the like, to renowned teams and sports associations. Notably, the company has in its kitty, contracts for supplying the official uniforms and apparel for the National Basketball Association and National Football League. Additionally, it is the footwear and apparel provider for USA Basketball, the governing body for the country’s Olympic teams since 2006.
Further, the company constantly strives to develop its eCommerce and direct-to-consumer (DTC) business model. All these strategies not only facilitate the enhancement of its market share, but also provide it with a competitive platform. Also, Nike boasts a strong balance sheet, which offers it the financial flexibility to drive future growth.
Notably, Nike’s strong portfolio of globally recognized brands like Nike, Converse and others, along with its focus on innovation has helped in further strengthening its leadership position. Also, the company has been on a roll as the “athleisure” trend is catching up in the U.S. This trend has been acting as a tailwind for many players in the athletic footwear and apparel industry.
While the abovementioned factors boost confidence, Nike’s top line raises concern. The company’s top line has been missing estimates for quite some time due to adverse currency movements. Moreover, its future orders witnessed a considerable slowdown and lagged expectations in the fourth quarter of fiscal 2016. Further, the company faces intense competition in both domestic and international markets from local as well as established players, such as Adidas AG (ADDYY - Free Report) (including Reebok) and Puma.
Going forward, the company expects lingering currency woes to strongly hurt revenues in the first half of fiscal 2017. Moreover, estimates have been witnessing a downtrend. Over the past 90 days, the Zacks Consensus Estimate of $2.39 and $2.73 for fiscal 2017 and fiscal 2018 has decreased 5 cents and 7 cents, respectively. However, estimates have been stable ahead of the company’s first-quarter earnings release.
Given the pros and cons embedded in the stock, Nike currently carries a Zacks Rank #3 (Hold).
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NIKE (NKE) Focuses on Strategic Growth: Should You Hold?
NIKE, Inc. (NKE - Free Report) , a leading footwear and athletic apparel retailer, continues to seek opportunities for expanding its global footprint, popularity and market share.
NIKE INC-B Price and Consensus
NIKE INC-B Price and Consensus | NIKE INC-B Quote
Nike has been increasing its popularity by acquiring contracts to supply sports-related apparel, shoes and the like, to renowned teams and sports associations. Notably, the company has in its kitty, contracts for supplying the official uniforms and apparel for the National Basketball Association and National Football League. Additionally, it is the footwear and apparel provider for USA Basketball, the governing body for the country’s Olympic teams since 2006.
Further, the company constantly strives to develop its eCommerce and direct-to-consumer (DTC) business model. All these strategies not only facilitate the enhancement of its market share, but also provide it with a competitive platform. Also, Nike boasts a strong balance sheet, which offers it the financial flexibility to drive future growth.
Notably, Nike’s strong portfolio of globally recognized brands like Nike, Converse and others, along with its focus on innovation has helped in further strengthening its leadership position. Also, the company has been on a roll as the “athleisure” trend is catching up in the U.S. This trend has been acting as a tailwind for many players in the athletic footwear and apparel industry.
While the abovementioned factors boost confidence, Nike’s top line raises concern. The company’s top line has been missing estimates for quite some time due to adverse currency movements. Moreover, its future orders witnessed a considerable slowdown and lagged expectations in the fourth quarter of fiscal 2016. Further, the company faces intense competition in both domestic and international markets from local as well as established players, such as Adidas AG (ADDYY - Free Report) (including Reebok) and Puma.
Going forward, the company expects lingering currency woes to strongly hurt revenues in the first half of fiscal 2017. Moreover, estimates have been witnessing a downtrend. Over the past 90 days, the Zacks Consensus Estimate of $2.39 and $2.73 for fiscal 2017 and fiscal 2018 has decreased 5 cents and 7 cents, respectively. However, estimates have been stable ahead of the company’s first-quarter earnings release.
Given the pros and cons embedded in the stock, Nike currently carries a Zacks Rank #3 (Hold).
Stocks that Warrant a Look
Some better-ranked stocks in the same industry include Deckers Outdoor Corp. (DECK - Free Report) and Francesca's Holdings Corporation , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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