Nike (NKE) will report Q1 earnings after the market closes today (16:15 ET last quarter) with a conference call to follow at 5 PM ET.

Current Cap IQ consensus estimates Q1 EPS of $0.63 ($0.57 last year) on revs of $9.92 bln (+9% Y/Y)

NKE will provide an update to FY19 revenue expectations. Investors are looking for high single digit revenue growth vs 2018 revs of $34.7 bln. NKE guided for the same level of revenue growth as the FY in Q1. 

Current Cap IQ Consensus estimates FY 19 EPS of $2.68 (vs $2.40 in FY 18) on revs +8% to $39.3 bln

NKE will also guide for Q2 revs on the call:

• Current Cap IQ Consensus estimates Q2 EPS of $0.53 (vs 0.46 last year) on revs of $9.27 bln (+8%)

Last quarter, the company beat on EPS estimates and raised FY 19 revs expectations. Other notables from Q4 included:

• NKE announced $15 bln buyback

• Sales ex-FX: Footwear +8%, Apparel +15%; NA +3%, EMEA +10%, APac/LatAm +13%, China +25%

• Gross margin increased 60 basis points to 44.7% vs. flat to very slightly up from 44.1% last year, due primarily to higher average selling prices, margin expansion in NIKE Direct and favorable full-price sales mix.

• Co expects 2019 gross margin expansion of ~50 basis points or slightly greater.

  • One of NIKE's biggest opportunities for FY 19 is to scale its Women's Sneaker business across both NIKE and Jordan 

  • Co noted that during Q4, the Jordan's Women's Sneaker biz nearly tripled. They said Jordan apparel was up double-digits in all geographies w/ Jordan in China up nearly 50%

TECHS:

On September 4, Nike announced it renewed its sponsorship of Colin Kaepernick and followed the announcement with a national advertising spot centered around Kaepernick. The salt of the earth flag lovin’ white contingency lost their mind and immediate (social) media backlash ensued.

After gapping down 3% from the Kaepernick news, shares have more than recovered. Recent articles have suggested sales may have been positively impacted from the advertisement. “Shocking.”

With a market cap slightly under $135 bln, NKE is the largest publicly traded apparel retailer and trades at just over 30x earnings estimates versus retail peers such as LULU (40x), UAA (91x), SKX (15x), DECK (18x)

NKE IS THE DOW’S TOP PERFORMER YTD UP OVER 35%

NIKE beats by $0.04, reports revs in-line; will update guidance on the call  (84.79 +0.52)

• Reports Q1 (Aug) earnings of $0.67 per share, $0.04 better than the S&P Capital IQ Consensus of $0.63; revenues rose 9.7% year/year to $9.95 bln vs the $9.92 bln S&P Capital IQ Consensus. EPS +18%, driven by strong revenue growth, gross margin expansion, selling and administrative expense leverage, and a lower average share count, partially offset by a higher effective tax rate.

• Revenues for the NIKE Brand were $9.4 billion, up 10% on a currency-neutral basis driven by double-digit growth internationally and in NIKE Direct, strong momentum in North America, and growth in almost every category led by Sportswear. Revenues for Converse were $527 million, up 7 percent on a currency-neutral basis, mainly driven by growth in Europe and Asia.

• North American revenue ex-FX +6% to $4.1B, EMEA +9% to $2.6B, Greater China +20% to $1.4B, APacLatAM +14% to $1.3B

• Footwear revenue +10% to $6B, apparel +11% to $2.95B, equipment -1%

• Gross margin increased 50 bps to 44.2% vs. 44.3% estimates, primarily due to higher average selling prices, favorable full-price sales mix and margin expansion in NIKE Direct, partially offset by higher product costs. 

• Inventories for NIKE, Inc. were $5.2 billion, flat to prior year, primarily driven by a clean marketplace with healthy inventories across all geographies due to strong full-price sell through on new innovation. 

• NIKE repurchased a total of 17.8 million shares for ~$1.4 billion during the quarter.