NIKE (NKE) is set to report Q1 (Aug) results today after the close, with a call to follow at 5:00pm ET.

The current S&P CapitalIQ consensus is for earnings growth of 17.9% yr/yr to $1.12 per share and revenue growth of 17.7% yr/yr to $12.47 bln.

NKE guided to FY22 revs above $50 bln last quarter.

NKE’s earnings beats have been inconsistent at best. In Q4, the company saw its second-largest beat in the last five years at $0.42. After such a large beat, analysts have significantly higher expectations for NKE in Q1. Q1 tends to be NKE's second-best quarter, behind Q4, so momentum from the previous quarter could continue into Q1 which also ramps up expectations.

NKE has experienced some supply chain disruptions that involved delayed transportation as inventory levels continued to be down in FY21 compared to FY20. NKE stated in its Q4 earnings call from late June that it expects these delays to persist throughout much of FY22.

On the revenue side, NKE is lapping a quarter affected by the pandemic. Revs fell 0.6% yr/yr last year. With Q1 containing many of the back-to-school months, NKE could see strong growth this quarter.

As a read through, we can point to Dick’s. Dick's Sporting Goods (DKS) raised its full-year guidance aidied by the back to school season. DKS also expressed optimism in golf, team sports, apparel, and footwear, all of which NKE is strong in.

In the previous quarter, NKE crushed expectations with analysts overestimating supply constraints and boycotts in China.

TECHS:

Since the solid report, the stock is now up over 18%, which runs the risk that any good news in Q1 is already priced in.

NKE is trading ~37x forward earnings, similar to its rival Adidas (ADDYY), which trades around 35x forward earnings. NKE is about 8% off from all-time highs seen in early August.

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