Nike’s investments in its direct-to-consumer channel and
digital capabilities are paying off. The higher costs from these investments,
however, are likely to pressure earnings. The impact of the trade war on Nike’s
business is a hot topic of discussion, and one that analysts are closely
watching. Nike’s top line results might also see negative impacts from currency
fluctuations.
The company also faces challenges in North America due to
tough competition in the retail industry and the rapidly-changing preferences
of consumers.
In the third quarter of 2019, Nike surpassed earnings estimates while revenues came in line with expectations. Revenue grew 7% to $9.6 billion while earnings totaled $0.68 per share. The company saw single-digit sales increases in its footwear and apparel categories. Revenue also increased across all its geographies with Greater China posting double-digit growth.
Nike’s shares have gained 15% so far this year while over the past three months, they have climbed 3%.