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Is Nike (NKE) a 'Buy' Ahead of Its Upcoming Earnings Announcement?

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Global sportswear leader Nike is set to report fiscal first-quarter earnings results on Tuesday after the closing bell. A Zacks Rank #4 (Sell), Nike has surpassed the earnings mark in each of the past four quarters. But with Nike widely underperforming this year, is the stock a buy prior to the release?

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Analysts are expecting the company to post a profit of 28 cents per share, reflecting negative growth of -60% versus the same quarter last year. Sales are projected to have declined -4.95% to $11 billion during the quarter.

Aggressive reductions in aging footwear franchises and a deep reset in China are weighing on sales, while promotions continue to pressure margins. Elevated expenses and ongoing digital traffic declines further limit Nike’s profitability.

A positive for investors is the company’s strong track record of beating earnings estimates. Nike delivered a trailing four-quarter average earnings surprise of 42%.

Still, ongoing pressures remain including structural cost headwinds related to tariffs. Despite rallying off the April lows, Nike (NKE - Free Report) shares are down roughly 7% this year and are underperforming the major indexes.

Our proprietary Zacks Earnings Expected Surprise Prediction (ESP) indicator does not conclusively predict another earnings beat. Investors would be wise to exercise caution ahead of the upcoming announcement.


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