Nike Stock Falls Ahead Of Unusual Earnings Report

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Nike (NKE) reports fiscal second-quarter earnings as the pandemic delivers a huge boost to its digital sales and workout apps. Nike stock fell.


Results come out after the close on Friday, an unusual time for Nike and companies in general.

Nike Earnings

Estimates: Wall Street expects Nike earnings to fall 10% to 63 cents a share, with revenue rising 2% to $10.55 billion. That would mark a return to top-line growth following two down quarters.

Results: Check back after the close.

E-commerce has been booming during the pandemic. Nike brand digital sales jumped 82% in fiscal Q1, accelerating from 75% growth in fiscal Q4. The company has set a goal to push online sales to 50% of total sales “in the foreseeable future.”

Meanwhile, Nike earnings got an encouraging sign last month, when key retail outlet Foot Locker (FL) blew past earnings estimates, posting a surprise gain.

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Nike Stock

Shares, which are on the IBD Leaderboard, closed down 2.3% at to 137.28 in Friday’s stock market trading. Among other athletic gear stocks, Under Armour (UAA) dipped 0.3%. Adidas, which announced plans recently to sell its Reebok brand, lost 1.4%. Lululemon (LULU), which beat Q3 forecasts earlier this month, fell 2.1%.

Nike stock sits near highs after finding support at the 10-week moving average in early November, according to MarketSmith chart analysis. Shares are extended from a 123.39 follow-on entry, meaning shares are in the buy range that extends to 135.73. The relative strength line has moved sideways even as the Dow Jones stock rises, a weak sign.

Meanwhile, Nike’s hugely popular Run Club and Training Club apps confront a new rival: Apple Fitness+. Apple (AAPL) announced its own new subscription workout service in December.

Nike saw its app downloads explode on the Apple app store after making in-app workouts free early in the pandemic. The apps give access to a huge mountain of customer data, from height and weight to browsing habits.

Lululemon is also making more moves in at-home workouts with its recent acquisition of Mirror as Peloton‘s (PTON) connected stationary bikes and treadmills have seen demand surge during the pandemic.

Find Aparna Narayanan on Twitter at @IBD_Aparna.


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