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What Can Investors Expect From Nike’s Q4 Earnings?

When the titan of trainers announces its earnings, people take notice, so what can investors expect from Nike’s quarterly report?

Nike (NYSE: NKE) is one of the biggest brands in the world, it goes beyond being a house-hold name and has instead become a cultural icon, integrated into each generation’s fashion choices. Nike is a longstanding company with plenty of potential for its customers as well as its shareholders. 

In March last year, along with the wider market, Nike’s share price plummeted to just $62 from all-time highs of $104 the month previous. However, it had a strong year, recovering from the pandemic induced volatility with plenty of growth in digital sales as the athleisure industry surged in popularity. Currently, the share price is hovering around the $144 mark — that is a 132% growth over a 12 month period. 

This sports and apparel titan is expected to release its most recent report this week and whilst it has had a pretty great year there might be a few things that investors need to watch out for. 

When is Nike’s earnings date? 

Nike is expected to release its quarterly earnings report on the 18th of March. This report will be for the quarter ending February 2021. The report will be released at around 1:15 pm pacific time (PT).

Where can I find the earnings report? 

Investors interested in reading Nike’s earnings report will be able to find it on the Nike investor relations web page. This report is the Q3 earnings report for the fiscal year 2021. For those who want to listen to the conference call, they can do so at 2 pm PT when it will be broadcast live. You can find the link on the investor relations page also.

What can investors expect? 

The last quarter saw Nike’s net income rise by 12%, driven mainly by lower administrative expenses and strong revenue. However, its excess inventory — stock that goes unsold — hurt last quarter’s profitability. This inventory excess continued into the start of this quarter which could again have a negative effect again on profit levels. 

Judging from several analyst’s analyses, expectations for Nike’s earnings report will see a small decrease year-over-year (YoY). The earnings per share (EPS) is expected to come in at $0.75 for the quarter. Last year Nike reported an EPS of $0.78 for the same quarter. 

Revenue estimates are expected at $11.05 billion, this would be a 15% increase from the reported $9.6 billion in the prior year. In the last quarter revenue was $11.2 billion, if this quarter’s revenue comes in equal to analyst’s expectations then revenue will be down by 1% quarter-over-quarter.

In fact, Nike’s own statement speculated a slow down of growth as restrictions across Europe, the U.S. and other markets continue to experience coronavirus-related restrictions. In revenue, it expects low-teens growth whilst the company focuses on maintaining a healthy inventory, as it limited purchases and continued its pause on stock buyback spending. In this way, it chose to focus on creating the best possible conditions for growth later in the year and going into 2022. 

Overall, investors can expect this quarter to be a bit more uncertain than last quarter, particularly after the recent rise in COVID-19 cases which could have affected overall sales. 

Looking Forward

The athleisure apparel trend is not likely to go anywhere as people have pretty much spent the last year in comfy activewear, and many items can be adapted to professional settings. Thus, even a full-return to offices over the next 6 months or so won’t dampen the trend. 

Additionally, Nike has been strengthening its inventory, making sure that there will be no significant shortages in its items for sale over the next quarter or so. Thus, having made it through a pandemic with very good results due to its brilliant e-commerce model it will continue to grow post-pandemic as people have almost fully switched over to digital forms of retail.

Considering Nike’s own forward-looking comments, this earnings report is not expected to be the most exciting. This might cause volatility for its stock as investors are notorious over-reactors when it comes to less than exceptional news. For those of us who decide to stay invested in Nike, there is a lot to think about for the next year or so. 

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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here