Nike Earnings: Fiscal Q4 May See This Long-Awaited Turning Point

Nike (NKE) earnings and sales are due after the close Thursday, and the world's dominant athletic apparel brand will be expected to address the question of whether its primacy in North America is under any threat.

Nike Shoes Australia Sale Earnings Estimates

Sales in the U.S. and Canada have declined, year over year, for the last three straight quarters. On the most recent Nike earnings call in March, Chief Executive Mark Parker pointed to a "reversal of trend" happening in the fourth quarter (the period to be reported on Thursday), an expected inflection point that comes as Nike rethinks its retail distribution and focuses on online commerce.

Analysts polled by Zacks Investment Research expect Nike earnings to grow 7% to 64 cents, on an 8% increase in revenue to $9.39 billion.

Within the North America segment, footwear sales have been leading declines. Nike has expressed confidence in its new products, however, including the Cheap Nike VaporMax Australia Sale, Air Max 720 and Epic React, as it looks to fend off Adidas' (ADDYY) resurgence in recent years.

As Nike pulls itself away from "undifferentiated, mediocre" retail outlets, Adidas sees an opportunity, says Piper Jaffray analyst Erinn Murphy.

"Overall, management sees the (North American) marketplace cleaner in 2018 and anticipates their growth in the region to be led by shelf-space expansion within existing distribution (12k doors vs. >24k for NKE) as the brand is fully distributed in about 10% of its footprint," she wrote last week. "Adidas sees any proactive Nike distribution reduction as a windfall for them."

Shares were down 1.5% at 72.35 on the stock market today amid a broad market retreat sparked by fears of a spiraling trade war. Cheap Nike air force 1 mens is now back in buy range after clearing a 70.35 entry point from a flat base and rising into extended territory by early June. Adidas dropped 1.8%, while Under Armour (UAA) dipped 0.3%.

Growth Abroad To Help Nike Earnings

Still, even if U.S. sales are sluggish, Nike earnings may not see much downside. At its investor day last October, Parker said he expects nearly 75% of the company's growth to come from outside the U.S., and maintained that the company would hit $50 billion in revenue within its five-year target. Nike's greater China segment has been outperforming other units, and sales in Europe are solid.

"Outside the U.S., while growth remains strong, Nike is likely taking share in Europe while sustaining (positive double-digit) growth in China," wrote Wedbush analyst Christopher Svezia on June 14.

He raised his price target to 82 from 75 on the expectation that Nike Air Max Womens 2018 will exceed estimates throughout fiscal 2019 due to accelerating growth in North America and possibly abroad, among other factors.

But Nike's exposure to China also represents a risk, as President Trump escalates a trade war with the world's No. 2 economy.

While Beijing's use of retaliatory tariffs on the U.S. may not affect Nike's Asia-based production, the government can still make business difficult via regulatory moves.

Government officials also could call for a boycott of U.S. goods, for example, impacting companies like Nike, Starbucks (SBUX) and Disney (DIS), which have a big presence in the country.

Meanwhile, Nike Australia Online Store is likely to field questions about its slew of executive departures, which number close to a dozen, in the wake of its #MeToo moment and reports of a "boy's club" working environment.