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What Wall Street Expects from Nike’s Q2 2019 Revenue

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Wall Street projections for NKE

Wall Street analysts expect Nike (NKE) to report revenue of $9.17 billion in the second quarter of fiscal 2019, representing a 7.1% rise on a YoY (year-over-year) basis. Nike is scheduled to report its fiscal 2019 second-quarter earnings results on December 20.

Nike’s management expects its fiscal 2019 second-quarter revenue to rise 9% on a currency-neutral basis. Its top line growth is likely to be driven by improving sales in North America and a robust performance overseas. The success of its direct-to-consumer business is also aiding its bottom line. However, unfavorable foreign exchange movements are likely to negatively impact its top line.

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For fiscal 2019, Nike’s management expects its revenue to come in at the lower end of the guided range. It has guided for revenue growth in the high-single-digit range. Foreign exchange volatility is likely to be the offsetting factor. Analysts expect sales growth of 7.6% to $39.15 billion in fiscal 2019. In fiscal 2018, which ended on May 31, Nike’s revenue witnessed a 6% YoY rise to ~$36.40 billion

Past performance

In the first quarter of fiscal 2019 (which ended on August 31), Nike reported revenue growth of 9.7% to $9.95 billion, marginally beating analysts’ estimate. Apparel sales for the Nike brand were up 11%, while the company’s Footwear segment saw 10% YoY growth in the quarter.

Nike Direct sales rose 12% in the first quarter, while Nike Digital sales were up 34%. Compared to its 6% growth in North America, its sales in Europe, the Middle East, and Africa reported an 11% increase, while its sales in Greater China rose 24%. The Asia-Pacific and Latin American regions saw 7% sales growth.

Analysts’ projections for NKE’s peers

Under Armour (UAA) reported its third-quarter results on October 30. Its revenue of $1.44 billion beat analysts’ consensus estimate by 1.8%. On a YoY basis, its revenue was up 2.4%. Its top line growth was driven by higher sales from its international and wholesale operations.

Skechers (SKX) reported its third-quarter results on October 18. Its sales of $1.18 billion missed estimates by 3.6%. However, its sales rose 7.5% on a YoY basis. Strength in its international wholesale and global retail businesses cushioned its top line.

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