Earnings Preview: Nike 1st quarter results

Analysts expect gains in revenue, net income in Nike's fiscal 1st quarter

Associated Press

NEW YORK (AP) -- Nike Inc., the world's largest athletic shoe and clothing company, should give an update on its global sales trends when it reports first-quarter results after the market closes on Thursday. Analysts expect gains in net income and revenue.

WHAT TO WATCH FOR: Nike's North American results have been strong, and analysts will be looking to see if that trend continues. Conversely, growth in China and Europe has been slower, so Wall Street will be looking for clues as to what Nike is doing to address those markets.

Nike may also update investors on its expansion plans for its Oregon headquarters and plans for the 2014 FIFA World Cup in Brazil.

In a note to investors, Canaccord Genuity analyst Camilo Lyon said that while he expects Nike will continue to gain market share in areas like basketball and running, comparisons will be tough during the quarter due to the year-ago quarter benefiting from the Olympics, a deal with the NFL and other factors. He has a "Hold" rating on the stock.

WHY IT MATTERS: Nike's results offer some insight into challenges facing the retail industry and also provide a glimpse into how much consumers worldwide are willing to spend, which is key to the global economic recovery.

WHAT'S EXPECTED: Analysts polled by FactSet, on average, expect Nike to earn 78 cents per share on revenue of $6.96 billion for the June-to-August quarter.

LAST YEAR'S QUARTER: Nike earned $1.23 per share on revenue of $6.67 billion in the first quarter a year ago. The company split its stock two-for-one in December, which would put last year's earnings at about 62 cents a share after adjusting for the split.

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