RBC Capital Markets analyst Piral Dadhania reiterated the Outperform rating on Nike, Inc.
Nike plans to release its third quarter fiscal 2024 financial results on Thursday, March 21, 2024.
Per Dadhania, the company's revenue growth expectations for 3Q24 have sufficiently rebased to low single-digit growth, which the analyst does not view as demanding and minimizes the risk of an FY24 guidance cut.
The analyst remains confident in execution, gross margin tailwinds, and outsized marketing firepower, which offers a relatively more defensive sporting goods option.
For the quarter to be reported, the analyst forecasts revenues of $12.17 billion, a gross profit margin of 45% (+170bps year over year), and diluted EPS of $0.72.
For the third quarter, the analyst sees fairly stable inventories of $8 billion and a free cash flow of $1.8 billion.
By region, Dadhania forecasts the most robust growth in APLA (Asia Pacific & Latin America), followed by Greater China.
For other regions, the analyst anticipates flattish or negative revenue declines - specifically, North America, EMEA, and others.
The analyst said the significant things to look out for in the quarterly release are China momentum and Lunar New Year trading commentary, product pipeline in support of the product range rotation cycle, and marketing plan ahead of the triple event year (2024).
Price Action: NKE shares are trading lower by 0.98% to $100.08 on the last check Tuesday.
