Nike reports earnings on Wednesday after the market closes. With the stock down 11% year to date, is it cheap?
As investors ponder whether the stock is fairly priced at current levels, some suggest Nike is facing an uphill battle; they worry that the recession is catching up with the company – and that a stronger dollar is crushing profits made overseas.
Nike had been one of the more resilient companies during the economic downturn largely due to the strong appeal of its brand but even Nike might not be able to remain unsigned by a recession of this magnitude. The firm is, however, actively managing costs – that includes cutting as many as 1,400 jobs, or roughly 4 percent of its work force, as part of a restructuring.
Nike previously took other steps to control costs, such as implementing a hiring freeze and cutting travel and other operating expenses. It also tightened its inventory controls.