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What Nike’s ‘Futures Orders’ Say About Global Market

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Sporting shoe and apparel maker Nike (NKE) will report fourth-quarter earnings after the bell on Thursday. Analysts expect a profit of 75 cents a share.

Mike Binetti, executive director and senior analyst at UBS Investment Bank, has his eye on Nike’s global futures orders, which means orders that retailers place for deliveries over the next five or six months.

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Binetti says global futures orders are a leading indicator for revenue and a tell-tale sign of what’s to come. They provide not only Nike’s outlook but insight into the entire athletic apparel sector.

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Nike breaks global futures orders down by region, and from the numbers, it’s clear that North America’s athletic apparel retailers are doing well. Orders from North America came in 11 percent higher than the same period a year ago.

China’s futures orders growth remains sluggish, coming in at 3 percent higher than last year, in line with the prior quarter. Binetti said that China’s sportswear sector is in a downturn, and Nike has been working to clear bloated inventories through heavy markdowns and store remodeling to lift sales.

Binetti has a “Buy” rating on Nike.

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Disclosure: UBS makes a market in Nike. Michael Binetti, a member of his team, or one of his household members has a long common stock position in Nike.

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