All eyes will be on Nike (NYSE:NKE) after today’s close. The Estimize community expects the sportswear giant to post EPS of $0.88. That’s four cents higher than what the Street is anticipating. This would show year-over-year earnings growth of 16%, the third consecutive quarter of double-digit growth, yet sliding a bit from the 25%+ seen in the last two quarters. The Estimize consensus for revenues of $7.71B also tops the Wall Street consensus of $7.64B. Revenue growth of 10% would mark the fifth consecutive quarter of double-digit growth.
Nike has been benefiting lately from the popularity of basketball shoes as well as the athletic wear fashion trend. Athletic wear performed incredibly well during the holiday season for many of Nike’s competitors, such as Under Armour (NYSE:UA), and for sporting apparel and goods retailers where Nike’s products are sold such as Dick's Sporting Goods (NYSE:DKS) and Foot Locker (NYSE:FL). Athletic attire is now appropriate for more than just the gym, and Nike is capitalizing on this trend.
One concern in the latest quarter was the slow pace of future orders growth, which hit a 4-quarter low. A strengthening dollar is to blame for exacerbating low demand from Western Europe and emerging markets, the latter being an area in which Nike was making progress. Despite the negative impact of foreign exchange, up until now Nike has been able to mostly hedge against such weakness.
Last quarter the company reported revenue growth that exceeded 20% in both China and Western Europe. The company also continues to be strong in North America, as well as increasing in popularity in South America and emerging markets. Today, investors will look for clues regarding the future implications of a stronger dollar, as well as initial 2015 guidance and comments about the overall industry.
And while Nike is primarily thought of as an athletic apparel company, their technology component is hard to ignore, especially with wearable technology heating up. Despite the discontinuation of their Nike+ FuelBand activity tracker in the spring, there is no doubt they will remain a major player in this space, and are working to re-establish their position in the world of wearable technology and smart apparel. For now, the sportswear company has nixed future plans to develop hardware, and decided to focus on software which will likely result in an app on the Apple (NASDAQ:AAPL) iWatch.