Nike Inc.
(
NKE
), a global leader in sports equipment and apparel is expected to
report its fourth quarter and fiscal 2012 financial results after
the market closes on Thursday, June 28, 2012.
The Zacks Consensus Estimate for the quarter is $1.37 per share.
This represents a year-over-year growth of approximately 10.5%. For
the quarter under review, revenue is expected to be $6,497 million,
according to the Zacks Consensus Estimate.
For fiscal 2012, the Zacks Consensus Estimate stands at $4.94
per share while revenue is expected to be $24,170 million.
Third Quarter Synopsis
Nike posted earnings of $1.20 per share in the third quarter of
2012, beating the Zacks Consensus Estimate of $1.16 and rising
11.1% from the year-ago earnings of $1.08. Management hinted that a
robust demand scenario for Nike brands coupled with selling and
administrative expense leverage and lower share count boosted its
bottom line.
Nike's total revenue grew 15.1% to $5,846 million from $5,079
million in the prior-year quarter, primarily driven by growth in
all key categories of NIKE Brand, and in geographic regions
excluding Japan. Revenue for the quarter surpassed the Zacks
Consensus Estimate of $5,829 million. During the quarter, all
brands including Converse, Hurley, NIKE Golf and Umbro, reflected
growth from last year, while Haan remained flat.
Zacks Consensus
The analysts following the stock expect Nike to post
fourth-quarter 2012 earnings of $1.37 a share, higher than $1.24
delivered in the prior-year quarter. Currently, the Zacks Consensus
Estimate ranges between $1.24 and $1.43 a share.
For fiscal 2012, the Zacks Consensus Estimate stands at $4.94
per share, higher than the year-ago fiscal earnings of $4.39. The
current Zacks Consensus Estimate ranges between $4.80 and $5.02 per
share.
Agreement of Estimate
For the fourth quarter of fiscal 2012, of the 15 analysts
covering the stock, 3 analysts revised their estimates downward,
while none have revised estimates in the upward direction, over the
last 7 and 30 days.
For full fiscal 2012, 4 out of 17 analysts covering the stock
revised their estimate downward, while one analyst revised in the
opposite direction, in the last 7 and 30 days.
Magnitude of Estimate Revisions
Despite a downward estimate revision, the magnitude of revisions
for the company depicts a neutral outlook for the upcoming fourth
quarter and fiscal 2012. Over the last 7 and 30 days, estimates for
the quarter and fiscal 2012 have remained unchanged at $1.37 and
$4.94 per share, respectively.
Surprise History
We noted that the company has been consistently surpassing the
Zacks Consensus Estimate for the past four quarters in the range of
3.1% to 12.4%.The average remained at 6.5%, indicating that Nike
has surpassed the Zacks Consensus Estimate by that measure in the
trailing four quarters.
Conclusion
In an attempt to expand its global reach and market share, Nike
is aggressively expanding its operations in the emerging markets
while focusing on direct-to-consumer business and other brands,
which augur well for future operating performance. Moreover, the
company's near-to-debt free balance sheet offers financial
flexibility to drive future growth.
However, sluggish discretionary spending and intense competition
amid rapidly changing customer preferences will continue to weigh
upon the company's future operating performance. Nike faces intense
competition in both domestic and international markets from local
as well as established players, such as Adidas AG (including
Reebok),
PVH Corporation
(
PVH
) and
Brown Shoe Company Inc.
(
BWS
).
Currently, Nike maintains a Zacks #3 Rank, which translates into
a short-term Hold rating. Moreover, we retain a long-term Neutral
recommendation on the stock.
BROWN SHOE CO (BWS): Free Stock Analysis Report
NIKE INC-B (NKE): Free Stock Analysis Report
PVH CORP (PVH): Free Stock Analysis Report
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