Nike earnings: What investors are watching for

Athletic apparel giant Nike (NKE) reports its fiscal first quarter results after the market close on Tuesday. It will be the last report under CEO John Donahoe. It was announced last month that Nike veteran Elliott Hill will take over the CEO role on October 14.

In the video above, Morning Brief anchors Brad Smith and Seana Smith preview what investors are watching for from the results.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Stephanie Mikulich.

Video Transcript

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First and foremost, we gotta talk about the swoosh Nike set to report its fiscal first quarter earnings after the bell today.

Just last month, the apparel company appointed Elliott Hill as the future CEO, the incoming CEO from John Donahoe that takes effect October 13th.

Nike facing some hurdles for the past couple of years.

Rising competition, macro economic headwinds.

Two of the factors there shares.

Right now you’re seeing them extended hours or pre market moving lower by about 3/10 of a percent here and overall, some of the expectations for this quarter, um, are not very optimistic.

Not very high hopes that you’re seeing from the analyst community at least coming into this print.

However, I think with the decision to have this executive change over, you’ve kind of already laid the groundwork.

For even if this past quarter is a dud or is under the expectation, then a lot of the eyes and a lot of the kind of attention is gonna be focused in on the future.

And in mid October and then, even as we get more of the kind of, perhaps investor day commentary mid November, that’s where it kind of swings towards.

Yeah, it certainly will.

I think investors are gonna be looking at this as very much something that’s in the past here.

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As you look ahead to Nike under Hill, what ultimately that is going to look like?

I think that is really the focal point here for analysts, for investors going forward on Nike.

But when it comes to this report, we are expecting to see a report of a 10% decline in sales, a lot of things that have been challenging here for Nike or some of their headwinds, that limited pipeline on sneakers.

We’ve talked to Adrian you over at Barclays about this time and time again, also mentioning the fact that demand for new models remains low.

Launches are still under performing on Nike’s Apps and Nike’s website, and that th those were warnings that we got from executives a few months ago, starting in the early summer.

So again, a lot of this has already been baked in, I think to the stock price.

You’re looking at year to day performance of off just about 18.5%.

We’re looking at losses of about 1% yesterday.

But again, I think the question, though going forward, is if we have any hints, or maybe what the leadership is going to look like under Hill, where Nike’s priorities lie.

I don’t know if we’re gonna get too much whether or not that’s gonna be held here for the investor day later on this year.

But again, investors very much an analyst very much focused on what happens now under that new leadership versus some of the trends that we’ve seen within Nike over the last several quarters.

I think just a huge return to science is what Hill might bring here.

I mean, this guy has a background in kinesiology, and so the stuff of how your body and how specifically your body functions based on the apparel you are wearing or the, uh, soul that are underneath of you.

I think in making sure that not just performance is able to click on all cylinders, but then you also have lifestyle, that the company is able to compete well in, but it really is the rise of some of the new competition.

You’ve got people that are just able to and companies that have been able to grow their businesses just by being in people’s faces all day on their social media feeds.

And so could we see some type of strategic acquisitions come forward in the future, not just from Nike but from some of the other major manufacturers as well.

That’s a question I ask myself every day.

We’ll ask those executives when we have them one, too.

Ultimately, just to wrap this up.

EPS that’s expected adjusted EPS 52 cents a share, revenue expected to come in at about $11.65 billion for the quarter.

Here we’ll see what the company ultimately reports, though later we will.

We know investors are very excited about Hill’s share surge.

As as we did get that news so again, any more, uh, commentary of colour.

I don’t know what that leadership will look like is something that the street will be focused on