Athletic apparel and footwear titan Nike
What analysts say:
- Buy, sell, or waffle? Sixteen analysts currently follow Nike. Ten are bullish, one isn't, and the rest can't make up their minds, rating Nike a hold.
- Revenues. Analysts predict second-quarter sales of $4.4 billion.
- Earnings. They also project fourth-quarter earnings of $0.86, for a year-over-year decline of nearly 23%.
What management says:
Nike doesn't make a habit of providing earnings guidance, but it did mention last quarter that futures orders from March to July grew 9% year over year. Futures orders allow customers to lock in orders ahead of time, providing some insight into nearer-term sales trends in Nike's athletic footwear and apparel categories.
What management does:|
Nike continues to do it, having steadily grown sales, earnings, and cash flow in the double digits over the past five years. Management plans to keep top-line expansion brisk; it recently set a goal to reach $23 billion in sales by fiscal 2011. That's 50% greater than total 2006 figures.
Looking at profitability trends, bottom-line margins have fallen recently, but appear to have stabilized at just less than 9%. Investors will soon find out whether margins remained stable for fiscal 2007, or whether rivals such as Adidas, K-Swiss
|
11/05 |
02/06 |
05/06 |
08/06 |
11/06 |
02/07 |
|
|---|---|---|---|---|---|---|
|
Gross |
44.6% |
44.4% |
44% |
43.8% |
43.7% |
43.9% |
|
Operating |
14.4% |
14.5% |
14.1% |
13.7% |
13.4% |
13.3% |
|
Net |
9.4% |
9.6% |
9.3% |
8.7% |
8.7% |
8.7% |
One Fool says:
Shares of Nike have climbed nearly 40% from their lows last August, but they've recently slipped back to $53. Based on full-year estimates, Nike trades at just less than 19 times earnings. That's still reasonable, given its stellar growth track record and ambitious sales goals through 2011. As long as future results mirror past successes, the company could continue to reward investors.
Lace up for further Foolishness:
Columbia is an all-weather Motley Fool Hidden Gems pick, while Under Armour click-clacked its way into the ranks of Motley Fool Rule Breakers recommendations. Try any of our Foolish newsletters free for 30 days.
Fool contributor Ryan Fuhrmann is long shares of Nike but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.
