After the close, Nike (NKE) is scheduled to report 3Q22 (Jan.) results with a conference call following at 5:00 p.m. ET.
For the quarter, NKE is expected to report EPS and revenue of $0.72 and $10.6 bln (+2% yr/yr), respectively.
During their last conference call NKE guided for Q3 revenue growth in the low single-digit range. NKE also reaffirmed its FY22 revenue guidance for mid single-digit growth. Whether NKE adjusts that outlook will be a major factor in how the stock reacts tonight and tomorrow morning.
Currently, analysts are seeing FY22 revenue growth of 5.4% and EPS of $3.62.
The main story heading into NKE's report revolves around the supply chain situation and its impact on sales and margins, especially in China.
NKE was optimistic on this topic last quarter, commenting that conditions were improving at its factories in Vietnam. NKE's performance in China is a significant concern heading into the print. China recently implementing strict lockdown orders across parts of the country, it's likely that this created a headwind for the company.
Gross margin will be another key metric to monitor. Despite intense inflationary pressures, gross margin expanded by 280 bps last quarter to 45.9%. These margins are a function of Nike’s pricing power.
TECHS:
Heading into the report, the stock is trading with a forward P/E of 22x, which seems reasonable for a top-tier company like NKE.
The stock has rallied into the 20EMA and has found some resistance today ahead of the print.
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