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Nike's 'Triple Double' Not Enough To Pull Out The Win In Q4

Nike's 'Triple Double' Not Enough To Pull Out The Win In Q4

Nike Inc's (NYSE: NKE) FQ3 2017 earnings print “sounded alarm bells,” Deutsche Bank’s Paul Trussell said in a report. He added that the company’s new "Triple Double" plan will likely not help FQ4 results.

Trussell maintained a Buy rating on Nike, while reducing the price target from $66 to $64 due to a lowering of estimates.

Earnings Print

The analyst stated Nike’s earnings print had the following concern areas:

  • Guidance for Q4 revenues was weaker than expected
  • Reported a GPM [gross profit margin] miss for Q3 and guiding to lower Q4 GPM due to a promotional environment in North America
  • Didn't provide any specific guidance for FY2018
  • Futures slowed for the fifth consecutive quarter to -1 percent on a constant currency basis

Related Link: Nike's Previous 4 Prints Pave Way For A Grand Slam

The New “Triple-Double” Plan

The company’s new “Triple-Double” plan is to double three factors:

  1. Cadence and scale of product innovation
  2. Speed of the supply chain
  3. Direct connections with the consumer

This plan is likely to boost Nike’s top and bottom line in FY2018 and beyond, Trussell commented. He reduced the Q4 and FY18 EPS estimates from $0.56 to $0.48 and from $2.68 to $2.60, respectively.

Image: Emily Elconin

Latest Ratings for NKE

Sep 2019MaintainsNeutral
Aug 2019MaintainsBuy
Aug 2019MaintainsOverweight

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