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What are Nike’s Earnings Prospects in Fiscal 3Q16?

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Nike’s historical and consensus earnings growth

Athletic goods company Nike (NKE) is slated to declare results for the third quarter of fiscal 2016 on March 22. The period pertains to the quarter ended February 29, 2016, for the fiscal year ending May 31, 2016. Expectations for the company’s financial results are positive.

Nike’s EPS (earnings per share) have grown at a CAGR (compound annual growth rate) of 13.9% over the last five fiscal years, and almost 25% year-over-year in fiscal 2015. Wall Street analysts estimate adjusted EPS of ~$0.49 in fiscal 3Q16, an increase of 9.7% from the same quarter of the previous year. Nike has produced positive earnings in the last fourteen quarters, consistently beating the market consensus on adjusted EPS.

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Competitors’ performance

In the fourth quarter of 2015, Nike’s competitors Under Armour (UA) and Columbia Sportswear (COLM) also came in ahead of market expectations. Lululemon Athletica (LULU) is expected to declare its fourth quarter and full-year results for fiscal 2015 later this month. LULU released upwardly revised EPS and revenue guidance for fiscal 2016 in January, backed by a strong holiday selling season. Nike and Under Armour make up 4.2% of the portfolio holdings in the Consumer Discretionary Select Sector SPDR ETF (XLY).

Quarterly highlights

With the Super Bowl and the NBA (National Basketball Association) All-Star Game falling within it, the third quarter was eventful and exciting for Nike. During the quarter, Nike released a number of new products and enhanced its digital and retail presence. We’ll discuss these factors and other growth drivers in greater detail in the following parts of this series. Let’s start with a recap of Nike’s year-to-date performance in fiscal 2016.

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