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Nike (NKE) to Post Q3 Earnings: Will it Surprise Again?
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Leading footwear and athletic apparel retailer, Nike Inc. (NKE - Free Report) is slated to report third-quarter fiscal 2017 results after the closing bell on Mar 21. The big question facing investors is, whether Nike will be able to deliver a positive earnings surprise in the quarter to be reported.
In the last quarter, the company posted a positive surprise of 16.3%. In fact, it has delivered an average positive earnings surprise of 15.8% in the trailing four quarters. Nike’s bottom-line beat the Zacks Consensus Estimate in each of the last four quarters. Let’s see how things are shaping up for this announcement.
Nike’s earnings surprise history remains impressive, backed by constant focus on capitalizing on growth opportunities and efficient risk management. The company has delivered positive earnings surprises for 18 straight quarters, while the top line surpassed estimates in the last two quarters.
The top line beat in the last two quarters can primarily be attributable to constant innovations, efficient supply chain, a great sync between digital and physical worlds and strategic investments. Notably, the company’s second-quarter fiscal 2017 sales came on the back of eCommerce growth as well as a revival in basketball shoes category. Further, the rebound in the basketball shoes category positions the company well to tackle competition from peers in 2017.
Moreover, Nike’s stock performance reveals that the company has outperformed the broader industry in the last three months. The stock improved 12.5% in the past three months, outpacing the Zacks Categorized Shoes & Retail Apparel industry's growth of 9.1% in the same period.
However, the company provided a subdued guidance for the third quarter, reflecting gross margin contraction and higher costs. It also expects currency headwinds to linger and hurt revenues in the fiscal second half.
Nonetheless, the company remains confident of driving sustainable and profitable capital efficient growth in the long term. This along with NIKE’s desire for increasing global footprint, popularity and market share demonstrates its growth appetite.
With these mixed factors at play, we would like to wait and see what's in store for this athletic goods retailer in the quarter to be reported.
Earnings Whispers
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: Earnings ESP for Nike is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 52 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Nike currently carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
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:
Constellation Brands Inc. (STZ - Free Report) , scheduled to report earnings on Apr 6, has an Earnings ESP of +2.21% and a Zacks Rank #3.
Tractor Supply Co. (TSCO - Free Report) , expected to report earnings on Apr 26, has an Earnings ESP of +3.77% and a Zacks Rank #3.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Nike (NKE) to Post Q3 Earnings: Will it Surprise Again?
Leading footwear and athletic apparel retailer, Nike Inc. (NKE - Free Report) is slated to report third-quarter fiscal 2017 results after the closing bell on Mar 21. The big question facing investors is, whether Nike will be able to deliver a positive earnings surprise in the quarter to be reported.
In the last quarter, the company posted a positive surprise of 16.3%. In fact, it has delivered an average positive earnings surprise of 15.8% in the trailing four quarters. Nike’s bottom-line beat the Zacks Consensus Estimate in each of the last four quarters. Let’s see how things are shaping up for this announcement.
Nike, Inc. Price and EPS Surprise
Nike, Inc. Price and EPS Surprise | Nike, Inc. Quote
Factors Influencing this Quarter
Nike’s earnings surprise history remains impressive, backed by constant focus on capitalizing on growth opportunities and efficient risk management. The company has delivered positive earnings surprises for 18 straight quarters, while the top line surpassed estimates in the last two quarters.
The top line beat in the last two quarters can primarily be attributable to constant innovations, efficient supply chain, a great sync between digital and physical worlds and strategic investments. Notably, the company’s second-quarter fiscal 2017 sales came on the back of eCommerce growth as well as a revival in basketball shoes category. Further, the rebound in the basketball shoes category positions the company well to tackle competition from peers in 2017.
Moreover, Nike’s stock performance reveals that the company has outperformed the broader industry in the last three months. The stock improved 12.5% in the past three months, outpacing the Zacks Categorized Shoes & Retail Apparel industry's growth of 9.1% in the same period.
However, the company provided a subdued guidance for the third quarter, reflecting gross margin contraction and higher costs. It also expects currency headwinds to linger and hurt revenues in the fiscal second half.
Nonetheless, the company remains confident of driving sustainable and profitable capital efficient growth in the long term. This along with NIKE’s desire for increasing global footprint, popularity and market share demonstrates its growth appetite.
With these mixed factors at play, we would like to wait and see what's in store for this athletic goods retailer in the quarter to be reported.
Earnings Whispers
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: Earnings ESP for Nike is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 52 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Nike currently carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
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:
Conagra Brands Inc. (CAG - Free Report) , expected to report earnings on Apr 6, has an Earnings ESP of +4.44% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Constellation Brands Inc. (STZ - Free Report) , scheduled to report earnings on Apr 6, has an Earnings ESP of +2.21% and a Zacks Rank #3.
Tractor Supply Co. (TSCO - Free Report) , expected to report earnings on Apr 26, has an Earnings ESP of +3.77% and a Zacks Rank #3.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>