Nike struggles at the $82 level

The company is set to release its first quarterly figures since this summer's World Cup.

Nike logo
Source: Bloomberg

Expectations have increased ahead of Nike Inc’s first-quarter figures which are due to be released on 25 September 2014. Adjusted earnings per share are expected to increase from $0.78 up to $0.878. These have been driven higher by sales figures of $7.773 billion, better than the previous periods $7.425 billion. All of this will contribute to an expected first-quarter pre-tax profit of $1.037 billion — an improvement from last quarter’s $912 million. It is also worth noting that only once in the last 13 quarterly releases has Nike failed to beat market expectations.

It is only now, in the aftermath of the football World Cup, that we will see who has benefited as the majority of the costs were front-loaded. Brazil was unexpectedly knocked out before the final in a rather shocking fashion, and this will have dented Nike’s sales.

Unlike many of the company’s competitors, it has a more evenly spread dependency on a variety of sports with basketball taking the lion’s share. An area it has been moving into on a more aggressive basis is golf. Having seen its primary golfing representative Tiger Woods suffer both on and off the golf course, it is timely that Rory Mcllroy is beginning to measure up to his undoubted potential and fill that void.

Shares in Nike have benefited as a number of competitors have suffered, and the previous problematic level of resistance at $80 should now become a key level of support. A period of consolidation while moving averages play catch-up might be needed before an expected solid set of results help the shares higher. 

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