Nike Inc. (NYSE: NKE) will release its Q1 2022 financial and earnings results on Thursday, September 23, 2021.
What to look for
Nike is facing a China problem, and this will be evident when the company releases its earnings. Therefore investors should be cautious ahead of the earnings release on Thursday. In the past quarter, there were worries about sales in Chia due to boycotts after Nike said it doesn't use forced labor from Uighurs and the COVID-19 pandemic. However, that was offset by solid sales elsewhere except in China. This and the rosy growth view through 2025 helped the stock, but that won't be the case because of problems around Vietnam, where almost 50% of its footwear production and 30% of apparel wear happens.
Earnings: Stockearning’s Estimated EPS for Q1 2022 is $1.12 per share. Historical EPS Performance for the past 12 quarters shows the company has beat estimates ten times (83%) and missed twice (16%). In the past quarter, the company reported diluted earnings per share of $0.93 and $3.56 for fiscal 2021.
Revenue: The company expects revenue growth to slow, with US sales expected to be around $12.48 billion, increasing 19% YoY, which is slower than the sequential quarter's growth of 96%. Revenue in Q4 2021 was $12.3 billion. For the full fiscal 2021, the company reported revenue of $44.5 billion, a 19% YoY increase.
Stock movement: Since the last earnings release, the stock price has gained 17.1% from $133.60 to the previous close of $156.42. Following earnings releases, the share has been UP on 26 occasions out of the past 45 quarters. So, the Historical price reaction suggests a 57% probability of the share price going UP after earnings release. Stockearning algorithm predicted that the first-day move is 5%, while the predicted move on the seventh day is 5%.
What analysts are saying
Piper Sandler analyst Erinn Murphy believes that the current supply chain problems present a buying chance for Nike stock. For fiscal Q1, Murphy anticipates a "solid beat" to earnings projections, fueled by continued strength in North America and Europe, "as brand heat remains solid." Murphy said that investors are concerned about manufacturing and supply chain disruptions in Vietnam, where Nike produces 44% of its global output, which might cause orders to shift from Q2 to Q3. However, the analyst believes that any short-term disruption will have little influence on Nike's long-term worth. As a result, the analyst maintains a "Buy" rating on the stock with a target price of $174.
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