Nike (NKE), the sports apparel giant, will be releasing fourth quarter fiscal year 2021 earnings results on Thursday 24th June. In the last fiscal year, the company announced revenue to the tune of $37.4 billion. Unsurprisingly, the pandemic presented challenges for the company, as supply chain disruptions impacted the North American arm of the business, which accounts for 30%. Last quarter, sales were down by 3% globally when compared with the previous year.
Covid-19 cemented management’s focus on growing digital capabilities, as the company seeks technology to overcome diminishing margins resulting from higher input and operating costs. The investment in the digital business paid off in the last quarter, which saw the company’s digital revenue streams account for 35% of the total business. Incremental adoption of technology, by way of the SNKRS app, should provide a further boost for the brand.
A geopolitical component to NKE success is U.S- Sino relations and a hostile political environment has potential to negatively impact the brand. China remains a key driver of revenue for the company with apparel sales surging over 50% during the last quarter. Given the speed of recovery in the region and rising consumer confidence, healthy sales are to be expected this quarter.
NKE share price has dropped almost 9% year-to-date, so what can we expect from the upcoming earnings report? Earnings per share is estimated at $0.51 with a reported EPS of $-0.51 for the same period of 2020. Last quarter, the company also posted a 20% earnings surprise on estimates for the quarter. Revenue is expected to climb 75% year-on-year to $11.05 billion for the quarter. Forecasts point to a strong quarter for Nike, as a decimated retail sector begins to slowly return to pre-pandemic levels.
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Tuesday, 22 Jun, 2021 / 7:50