Nike, Inc is a world-renowned athletic company that focuses on the design and manufacture of clothing, apparel, and sports equipment. Today, Tuesday, September 22, the company will announce its after-market fiscal third-quarter earnings and is currently expected to post a substantial increase over its second-quarter fiscal earnings. NKE stock has soared to fresh all-time highs after reaching its 52-week-low of $60.00. NKE reached $120.48 on September 15, signaling a rise of 100 percent from its 52-week low. Since then, the stock has stabilized about $114 ahead of today’s earnings release.
As for the earnings report today, it is predicted that Nike will bounce back from the -0.51 posted for the second quarter. An EPS of 0.44 for Q3 2020 is currently expected to be announced by the firm. In comparison, the first and second-quarter earnings of Nike were both swings-and-misses in 2020.
During the fiscal fourth quarter of 2019, the last time the company exceeded earnings expectations was. For every quarter since its fiscal third quarter of 2019, Nike has announced a decrease in EPS. Nike missed earnings by 0.58 in the recent earnings report (fiscal second-quarter). The business was projected to have an enormous decrease in EPS from 0.53 to 0.07 due to the pandemic. Instead, a much more dramatic drop was announced by the firm.
Nike posted an EPS of -0.51 in Q2 2020, signaling a decrease of 1.04. The balance sheet of the Nike corporation currently holds assets of $31.342 billion and liabilities of $23.287 billion. At present, their overall equity stands at $8.055 billion. The latest price/earnings ratio of Nike currently sits at 70.86. The company has retained its $0.245 per share dividend. Since it began in 2007, Nike has managed to raise its dividends.
While the NKE stock price has indicated a boom in the company’s investor confidence, the fact is that the latest quarterly earnings of Nike do not promote confidence on the surface at all. For a full recovery, the stock is already priced-in. Nike would need to fulfill the high standards that are out there, at the very least. Even if the firm meets its earnings targets, it may still not be sufficient to stop a decline in the stock price. The company is also underperforming in terms of sales and net income as opposed to its pre-COVID figures.