Swoosh (NKE Earnings)
After the close, NIKE (NKE) is scheduled to report 4Q22 results with a conference call following at 5:00 p.m. ET.
Current consensus estimates stand at EPS and revenue of $0.82 and $12.1BN, respectively.
NKE will probably provide FY23 revenue guidance in broader terms. During the 4Q21 call last year Nike guided for FY22 revenue to be "above $50 bln."
In Q3 Nike reaffirmed its FY22 revenue growth guidance. They forecasted growth in the mid-single digits range versus the prior year.
NKE will need to guide for revenue of $51.76 bln too meet expectations. That equates to yr/yr growth of 10.7%, assuming FY22's revenue comes inline with expectations.
With a strong brand name and pricing power, NKE has been able to mitigate the impact of rising costs. In Q3, gross margin expanded by 100 bps to 46.6% due to fewer markdowns and higher mix of full-price sales. For Q4, NKE forecasted margins to expand by at least 150 bps yr/yr.
Supply chain issues and available inventory will be a key factor once again this quarter. One area of concern is China, where government-imposed lockdowns have hurt sales. Last quarter, sales in China slipped by 8%, but the drop could be more severe in Q4 since the pace of lockdowns really accelerated after the quarter ended.
NKE has topped EPS estimates in seven straight quarters.
TECHS:
NKE shares are down by about 16% since the company last reported earnings on March 21.
Since the last NKE report, Under Armour (UAA), Dick's Sporting Goods (DKS), and Academy Sports + Outdoors (ASO) have issued a mixed set of earnings reports that reflect healthy-ish (slowing) demand. These companies experienced some gross margin erosion which weighed on their fiscal year outlooks.
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