Nike Earnings On Tap Amid Footwear Supply Crunch

Sports apparel giant Nike (NKE) will report first-quarter earnings late Thursday, amid supply-chain headwinds. Nike stock is in a base but below a key level.


Pivotal Research analyst Mitch Kummetz said in a note to clients on Sept. 20, he’s “bullish on the company’s quarter but less so on its outlook.”

He wrote that June-August were three “very strong months at retail,” with lean inventories producing solid gross margins for Nike. Additionally, while easing COVID restrictions in the U.S. has led to some shifts in consumer purchasing, athletic momentum has yet to wane, he said.

However, Kummetz said he’s concerned about the Dow Jones giant’s manufacturing exposure to Vietnam, which has been facing COVID-related shutdowns and restrictions.

Nike sources most of its shoes from Vietnam. And with more than 55% of Nike revenue coming from its footwear segment, sales could suffer going forward.

Nike Earnings

Estimates: FactSet analyst expect Nike earnings per share to rise 18% to $1.12 per share. Sales are seen growing 17% to $12.47 billion in the same period.

Results: Check back Thursday after the close.

Nike Stock

Nike shares rose a fraction before the open in Wednesday’s stock market trading. NKE stock has an official buy point of 174.48 from a flat base, according to MarketSmith chart analysis.

But shares have fallen 11% from their all-time high of 174.38 intraday on Aug. 6. Nike stock pierced its 50-day line on Sept. 2 and has been trading below it since then.

Its relative strength line is trending lower. Nike stock’s RS Rating is 78 out of 99, while its EPS Rating is 69.

Rival athletic apparel maker Under Armour (UAA) was not yet trading. UAA stock has been trending lower for weeks after nearly breaking out. Meanwhile, Deckers Outdoor (DECK), which sells Hoka athletic shoes as well as Ugg boots and other specialty footwear, also was quiet. DECK stock reversed lower late last week after flirting with a breakout. Skechers (SKX) was inactive early Wednesday but has been declining.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.


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