On Thursday after the bell, sportswear giant Nike (NKE) will report third-quarter results, and most analysts expect the Swoosh brand to post strong earnings once again. Analysts polled by Bloomberg predict Nike will report adjusted earnings per share of 75 cents on revenue of $11.008 billion.
Jay Sole of UBS expects the Swoosh brand to see growth in all geographies. “It’s going to be a good report. I think Nike is going to talk about their business continuing to bounce back from the pandemic. I think we’re going to see really strong growth in greater China — continuing rebound in the U.S. and even in Europe,” he said.
“I expect them to deliver solid growth, even though stores [in Europe] have been shut down because of government-mandated restrictions for the last three months. Despite that, I still think Nike’s going to show pretty good growth.”
John Kernan of Cowen Equity Research points to the strength of Nike’s digital platform.
“The brand is still resonating more than anything else with the Gen Z/millennial consumer, these days, and, you know, it’s on both performance and lifestyle basis, [and] their digital platform has expanded tremendously. We expect e-commerce revenue will likely be up over 50% again, year-over-year globally, and the financial model we think is poised for inflection on a margin basis into the coming years.”
Cowen has raised its price target of Nike to $173, up from $170.
Sam Poser of Williams Trading tells Yahoo Finance that he will be looking for the guidance the Swoosh brand gives.
“I think that’s what everybody wants to hear about, what’s coming next. How big was their direct business, what’s going on in Europe, what’s going on in China? ... What are they doing to continue to build the strength of the Nike and Jordan brands?” he said.
He expects the Swoosh brand’s guidance will err on the conservative side.
“I think the numbers are going to be pretty good. I think whatever they guide is going to prove ... conservative … I think their business is really strong. I know there’s a lot of talk about the port delays. It’s definitely impacted them to some degree, but it’s a soundbite that demand is so high that they’re making the best out of whatever they’ve got. How they guide is going to be a whole nother story,” he said.
Poser also notes that the COVID-19 pandemic pushed Nike’s plans forward by years. “I think that what the pandemic did is shift the way people shop to more digital, more different kinds of engagement. I think that is here to stay. A lot of people we’ve talked to said that their plans for direct to consumer during the pandemic were pushed forward, like three to five years in six months … Now, when [Nike CEO John] Donahoe was hired, that was pre-pandemic. He is the guy at the helm now. He was hired to be there for this direction that the company is going in and all of that happened faster.”
Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.
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The Link LonkMarch 17, 2021 at 11:14PM
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Nike earnings preview: The Swoosh brand looks poised for another strong quarter - Yahoo Finance
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