More retailers are out with quarterly earnings results this week. While some are late reporters for the Q4 season (GameStop) and others are early reporters for Q1 (Nike, Signet Jewelers and Finish Line), they all have one thing in common: analysts have been revising their estimates downward into the announcements.
First up this week is athletic retailing giant, Nike. Just ahead of its FQ3 2016 report, the company introduced the first-ever power lacing sneaker, an ode to Marty Mcfly in Back to the Future. Nike's creative and innovative prowess has been leaps and bounds ahead of the competition in recent years, solidifying its staunch market position in the footwear industry. In the past 12 months Nike has rode 4 consecutive earnings beats to a 29.6% increase in share price.
Still this wasn't enough to carry Nike, which reported mixed results in its third quarter earnings. The sportswear giant beat the Estimize consensus by 2 cents on the bottom line but missed its revenue estimates by $176 million. The quarter was highlighted by strong year over year growth in its core North America and Chinese businesses. Moreover, Nike's most important metric, future order growth, crushed expectations. On a constant currency basis, global future orders rose 17% which was supported by China's 36% growth in the same metric. Regardless shares of Nike fell 6% in after hours trading reflecting lingering concerns over weak consumer spending. If this is any indication for the rest of the consumer discretionary companies, this isn't too promising.