Earnings Preview: Nike

Nike (NKE) is expected to report Q2 earnings after market close Wednesday Dec. 17, with a conference call scheduled for 5:00 pm ET.

Guidance

Analysts are looking for a profit of 78c on revenue of $4.69B. The consensus range is 73c-83c for EPS, and revenue of $4.56B-$4.83B, according to First Call.

Analyst Views

During the quarter, Nike announced a 9% dividend increase payable on January 5 and a $5B share buyback program, and said it is working to overcome foreign labor issues. Nike has been able to survive thus far in this economic downturn due to the currency benefits of a weak dollar and strong international growth; however, some analysts expect Nike's growth will be slowed by lower consumer spending around the globe during the quarter and a stronger dollar.

Banc of America says that despite a solid balance sheet, Nike's growth into FY2010 will be constrained by slowing global demand. Stifel Nicolaus expects Nike will show deceleration in the recession, despite strengths such as strong cash flow and global brand power. At the same time, Citigroup believes Nike's results could be better than expected due to share gains, stock buybacks, and momentum in emerging markets.

Analysts and investors will listen for comments from the company on macroeconomic headwinds such as declining consumer spending as well as increased costs for outsourcing overseas.