What To Expect Ahead Of Nike’s Earnings?

Nike will post quarterly earnings today in what’s been a trying year for the firm, so what should we expect and how will the market respond?

Dec. 20, 2021

Nike (NYSE: NKE), the world’s largest sportswear manufacturer, is set to release its latest batch of quarterly earnings later on today. It’s been a mixed year for the Oregon-based company. Posting solid growth of over 15% year-to-date (YTD) would normally be cause for celebration, but this lags the almost 25% gain of the S&P 500 rather substantially.

Declining overseas sales and a whole host of supply chain issues have caused major disruptions for the company. However, out of all the major players in the sporting industry, Nike seems to be performing quite admirably. Main rivals Adidas have seen a sharp decline of over 16% YTD, showing just how difficult a year it’s been for the sportswear industry.

Investors will be eager to see Nike’s plans for navigating such an uncertain market as we move into the new year. 

When is Nike’s earnings date?

Nike reports earnings for the second fiscal quarter of 2022 on Monday, December 20 at 4:15 PM Eastern Time.

How can I listen to Nike’s earnings call?

Nike’s earnings call will be streamed live on the companies website. You can access the call here. To access the call transcript, as well as the shareholder’s letter and the financial statements for the quarter, all you need to do is go to Nike’s investor relation page.

What to expect from Nike’s earnings?

Analysts aren’t expecting a bumper quarter from Nike. Expectations for revenue are relatively flat at $11.25 billion compared to last year’s $11.2 billion. Profitability is also expected to take a hit, with analysts predicting diluted earnings per share (EPS) to come in at $0.63 versus the $0.78 reported for the year-ago quarter.

Much of this is anticipated due to declining overseas sales, where it’s expected that Nike will post a 6% fall in sales in China – a market that accounts for almost 20% of its total revenue as of last year.

Beating analyst expectations here would give investors a huge confidence boost entering the new year. It would show that Nike is navigating current supply chain issues and market uncertainty well, and quell any shareholder fears that 2022 could see the company post big losses.

Investors will be interested to hear exactly how Nike plans to end ongoing disruptions at its manufacturing hub in Vietnam, one of only two countries alongside China that house over 100 Nike factories. Labor shortages following intense country-wide lockdowns have left Nike in the midst of a major inventory problem. If the company can show it has meaningful plans to counteract these issues, investors will no doubt remain content.

Given the uncertain nature of 2021 and the myriad of issues faced by all retail companies, Nike will be hoping to leave the year behind and return to the reliability and consistent profitability its become accustomed to. Investors will be hoping for optimistic outlooks for the coming year. Further conservative outlooks could see the stock drop further as wider market volatility continues to stir up fear across Wall Street.