), a global leader in sports equipment and apparel, to beat
expectations when it reports first-quarter fiscal 2014 results on
Sep 26. In the past quarter, it posted a positive surprise of
approximately 2.7% and we believe that the company will continue
with its upbeat performance this quarter as well.
Why a Likely Positive Surprise?
Our proven model shows that Nike may beat earnings because it
has the right combination of 2 key components.
Positive Zacks ESP:
Nike currently has an
of +2.56%. This is because the Most Accurate Estimate stands at
80 cents per share, while the Zacks Consensus Estimate is pegged
at 78 cents.
Zacks #3 Rank (Hold):
Note that stocks with a Zacks Rank #1, 2 and 3 have higher
chances of beating earnings. The Sell rated stocks (#4 and 5)
should never be considered going into an earnings
The combination of Nike's Zacks Rank #3 (Hold) and Earnings
ESP of +2.56% makes us confident of a positive earnings beat on
What is Driving Better-than-Expected Earnings?
Nike's strong portfolio of globally recognized brands - such
as Nike, Converse, Chuck Taylor, Hurley, All Star, One Star, Star
Chevron, and Jack Purcell - and its focus on innovation have
helped in strengthening its position. Moreover, the company is
seeking to expand its global footprint and increase market share
by acquiring new brands, developing its direct-to-customer
business and divesting underperforming brands.
We believe that the company's prudent investment as well as
strategic initiatives toward product innovation and brand
building will increase its customer base and profitability. Going
forward, we expect the company's top-line growth to remain
strong, given the rise in its future orders.
The company has surpassed the Zacks Consensus Estimate in the
trailing 4 quarters with an average surprise of approximately
Other Stocks to Consider
Nike is not the only firm we are looking up to this earnings
season. The following companies are also likely to beat earnings
in the to-be-reported quarter:
) with an Earnings ESP of +1.10% and a Zacks Rank #3 (Hold).
Ralph Lauren Corp.
) with Earnings ESP of +0.46% and a Zacks Rank #3 (Hold).
Dollar Tree Inc.
) has an Earnings ESP of +1.70% and a Zacks Rank #3 (Hold).
BUCKLE INC (BKE): Free Stock Analysis Report
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RALPH LAUREN CP (RL): Free Stock Analysis
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