The firm's senior analyst Ike Boruchow noted that traffic trends have improved in early September following a dismal start to the back-to-school season. However, the analyst sees risk from warmer weather for the next few weeks — a development unfavorable for the company.
In anticipation of a guidance cut, premised on competitive threat, sentiment toward the stock is weak. However, Wells Fargo believes the company could clear the lowered bar for the first quarter, given the sales lift from the Olympics and a conservative margin guidance. The firm also believes the guidance for the fiscal year is safe now.
Although the firm believes Nike's stock will trade up following the results announcement, towing in line with the trend in the previous three first quarters, the company said the stock could suffer if forex futures growth continues to deteriorate and if inventory levels remain elevated.
Concluding, Wells Fargo said the gross margin outlook for the remainder of the year will largely hinge on Nike's ability to rein in inventory growth overseas.
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Date | ticker | name | Actual EPS | EPS Surprise | Actual Rev | Rev Surprise |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.