Earnings, Self-Tying Shoes, Rio And More From Nike Ahead Of Earnings
So-called athleisure apparel is a smoking-hot segment of the retail industry and we’ll see if it can pump up the bottom line of Nike Inc (NYSE: NKE) when the athletic apparel maker reports earnings after the bell.
The stock got a boost Monday after J.P. Morgan swapped Lululemon Athletica inc. (NASDAQ: LULU) for NKE on its Analyst Focus list, an interesting move so close to an earnings announcement.
“Nike's brand is best-in-class with significant runway remaining in the long-term story (with both top-line and gross margin)—a compelling combination," according to the analyst note
This comes less than a week after NKE unwrapped its latest innovation, the self-lacing gym shoe called the HyperAdapt1.0. It plans to release the shoes at Christmas in three colors only to members of Nike+.
Analysts reporting to Thomson Reuters are looking for, on average, earnings per share of $0.49, up from $0.45 cents a share in the year-ago period. That’s a 9% gain, but below the strong double-digit profit growth the company reported the last eight straight quarters. Analysts are expecting top-line sales to ring up at $8.2 billion, a 10% jump over last year’s revenues but remember, past performance is no guarantee of future results.
Can NKE Beat Expectations?
In the quarter that ended in November, NKE said its future orders—an important metric of near-term growth of upcoming orders—were 20% higher, adjusted for currency fluctuations. A Macquarie analyst called those numbers “absolutely astounding.” NKE has a long history of beating expectations. Can that happen again?
On the conference call, analysts will be listening for insight into the new sneakers and future orders as well as any information executives share about sales ahead of and during the Olympics this summer in Rio.
Short-term options traders have priced in a potential 5.5% share price move in either direction around the earnings release, according to TD Ameritrade thinkorswim® platform’s Market Maker Move indicator.
Going into earnings, call and put trading is active, running at about three times average. In the short-term, call buyers seem to be targeting the March 65 and March 67½ calls. Put buyers are at the 61 and 63 strikes. The implied volatility is at the 70th percentile, compared with its typical middle range.
Note: Call options represent the right, but not the obligation, to buy the underlying security at a predetermined price over a set period of time. Put options represent the right, but not the obligation, to sell the underlying security at a predetermined price over a set period of time.
Probability analysis results from the Market Maker Move indicator are theoretical in nature, not guaranteed, and do not reflect any degree of certainty of an event occurring. TD Ameritrade and all third parties mentioned are separate and unaffiliated companies, and are not responsible for each other’s policies or services. Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold. Market volatility, volume, and system availability may delay account access and trade executions. Past performance of a security or strategy does not guarantee future results or success. Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options. Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request. The information is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy, and is for illustrative purposes only. Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading. TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2016 TD Ameritrade IP Company, Inc. All rights reserved. Used with permission.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.