Nike Q4 figures expected during the World Cup

On Thursday Nike looks set to post improved revenue but slightly softer earnings per share.

A Nike sign outside a branch
Source: Bloomberg

The Nike TV advert that aired before the World Cup kicked off featured, among others, Frank Ribery, Tim Howard, Zlatan Ibrahimovic, Neymar da Silva Santos Junior and David Luiz. As it turns out, one of those featured failed to qualify for his country and one will not kick a ball due to injury; at the moment the likely representatives after the group stages are two Brazilians and an American. As any football fan will confirm, predicting who will be successful at a World Cup is a particularly difficult task, and trying to base a business model around one must be equally problematic.

The market is expecting the adjusted EPS to drop from 0.76 cents last year to 0.751 cents later this week. The comparative sales, however, are expected to improve from $6.97 billion up to $7.34 billion. All of this will unwind to leave the pre-tax profit of $875 million down from last year's $883 million. It is worth noting that Nike has been able to outperform market expectations for the last seven quarters.

Looking at the chart, the shares have struggled over the last nine months as they have traded in a range between $70 and $80. They are currently sitting in the middle of this range and are hovering just above the moving averages; the 50-, 100- and 200-day moving averages are all converging just off the $75 level. If the shares can remain above this support then a fresh test of the top of this range could materialise.

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