Nike reports earnings after market close on Tuesday, Sept. 25, with its stock just shy of all-time highs. Here’s a look at what might be expected from the athletic giant’s results.
Nike (NKE) reports fiscal first-quarter earnings after market close on Tuesday, September 25. The stock is trading at all-time highs heading into the report, its 34.8% year-to-date return easily beating the S&P 500’s (SPX) 8.7% increase.
For the quarter, NKE is expected to report adjusted EPS of $0.62 on revenue of $9.93 billion, according to third-party consensus analyst estimates. In the same quarter last year, adjusted EPS came in at $0.57 on $9.07 billion in revenue.
The rise in the U.S. dollar is one factor that analysts are expecting to weigh on this quarter’s report because about 60% of the company’s is international. The Bloomberg Dollar Index, which measures the U.S. dollar against a basket of global currencies, has mostly been between $94 and $96 during NKE’s fiscal first quarter, whereas it was around the $90 level during the fiscal fourth quarter last year.
The stock had dipped briefly after the company put itself in the spotlight with its recent advertising campaign and has been dealing with political controversy from that as well.
Outside of that recent news, the North America region and China have been two of the main focuses among analysts in recent quarters.
After several years of slowing growth and year-over-year sales declines in North America, NKE returned that division to positive growth and management said its goal is to deliver mid-single-digit growth over the next five years. When NKE last reported, North America revenue increased 3% year-over-year to $3.88 billion. For all of fiscal 2018, that segment’s sales declined 2% to $14.86 billion.
Management has indicated that its direct-to-consumer channels, as well as launching new, innovative products are two of the ways they plan to drive growth in North America
In Q4 last year, NKE said the Greater China region was growing at almost twice the rate as any other regions. Sales in the region increased 35% year-over-year in fiscal Q4 last year, generating $1.47 billion in sales. The ongoing back-and-forth on trade between the U.S. and China is another area some analysts have expressed concerns, as both apparel and sporting goods were among the goods that have had tariffs placed on imports.
Nike 2018 Stock Chart. Outside of a few dips here and there, NKE has steadily climbed so far in 2018. With the stock close to all-time highs, investor and analyst expectations are on the high end ahead of tomorrow’s report. Chart source: thinkorswim® by TD Ameritrade. Not a recommendation. For illustrative purposes only. Past performance does not guarantee future results.
Options traders have priced in a 5% stock move in either direction around the upcoming earnings release, according to the Market Maker Move indicator on the thinkorswim® platform. Implied volatility was on the high end at the 81st percentile as of this morning.
In short-term trading at the September 28 weekly expiration, most of the recent trading on both the call and put side has been right around the money. The 85-strike call at this expiration, as well as many of the upcoming weekly and monthly expirations, has seen heavier volume.
Recent trading has been lighter on the put side across expirations. There has been a smattering of activity across strikes, with concentration at the 85-strike put across many of the upcoming weekly and monthly expirations.
Note: Call options represent the right, but not the obligation, to buy the underlying security at a predetermined price over a set period of time. Put options represent the right, but not the obligation to sell the underlying security at a predetermined price over a set period of time.
for thinkMoney ®
Financial Communications Society 2016
for Ticker Tape
Content Marketing Awards 2016
Probability analysis results from the Market Maker Move indicator are theoretical in nature, not guaranteed, and do not reflect any degree of certainty of an event occurring.
TD Ameritrade and all third parties mentioned are separate and unaffiliated companies, and are not responsible for each other’s policies or services.
Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.
Market volatility, volume, and system availability may delay account access and trade executions.
Past performance of a security or strategy does not guarantee future results or success.
Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.
Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.
The information is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy, and is for illustrative purposes only. Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.
This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.
TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2018 TD Ameritrade.