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Will Nike’s Q4 Revenue Surpass Expectations?

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Revenue trend in fiscal 2019

Nike (NKE) exceeded analysts’ revenue expectations in the first two quarters of fiscal 2019 and matched estimates in the third quarter of fiscal 2019 (ended on February 28). Nike’s revenue grew 7.0% to $9.61 billion in the third quarter. Excluding the impact of currency fluctuations, the company’s revenue grew 11%. Nike’s digital business grew 36% on a constant currency basis.

Nike brand’s revenue grew 7.0% to $3.81 billion in the North America region but missed analysts’ forecast of $3.87 billion. The company’s revenue from Europe, the Middle East, and Africa division grew about 6% to $2.44 billion while Asia-Pacific and Latin America’s revenue grew 3% to $1.31 billion. Nike brand’s revenue from Greater China grew by an impressive 19% to $1.59 billion with digital sales rising over 60% in the third quarter. Overall, Nike’s revenue grew 8.7% to $28.9 billion in the first nine months of fiscal 2019.

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Expectations for fiscal Q4 revenue

Nike anticipates its revenue to rise in the high-single-digit range on a constant currency basis in the fourth quarter of fiscal 2019, which ended on May 31. Nike expects its reported revenue growth in low single digits in the fourth quarter, taking into account an estimated six percentage point impact of currency headwinds.

Analysts expect Nike’s fourth-quarter revenue to grow 3.8% to $10.2 billion. Nike’s revenue is forecasted to rise 7.4% to $39.1 billion in the full-year fiscal 2019.

The company is striving to improve its revenue through continued innovation, enhanced digital sales, expansion of women’s business, and further international growth.

Smaller rival Lululemon (LULU) reported a 20.4% rise in its revenue to $782.32 million in the fiscal 2019 first quarter, which ended on May 5.

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