On The Fly: What to watch in Nike's earnings report

Nike (NKE) is scheduled to report results of its first fiscal quarter after the market closes on Tuesday, September 27, with a conference call scheduled for 5:00 pm ET. What to watch for: 1. INCREASED COMPETITION: Nike is under pressure from competitors including Under Armour (UA) and Adidas (ADDYY). In a recent note to clients, JP Morgan analyst Matthew Boss wrote that Adidas sneakers, including the Stan Smiths and the Gazelle, have been taking market share in the casual category, specifically from Converse, which is owned by Nike. Boss, who removed Nike from the Analyst Focus List, said recent athletic field work across global channels indicates North America trends remain soft quarter-to-date. In a September 21 note about Skechers (SKX), Morgan Stanley analyst Jay Sole said consumer preferences in athletic footwear are shifting toward "pure fashion" -- Adidas (ADDYY) styles as compared to Nike-esque running shoes. Earlier this month, Piper Jaffray analyst Erinn Murphy downgraded Nike to Hold, saying that the company's growth in Europe appears to have been dampened by increased competition in the region, and that the "resurgence" of Adidas in the region, as well as the rebound of Puma, Reebok and New Balance, is hurting Nike. 2. RIO OLYMPICS: Nike was an official supplier of this summer's Rio Olympic Games. In an August note, Citi analyst Kate McShane said that innovation in athletic footwear was unexciting for back-to-school," adding that that was "surprising for an Olympic year." Nike executives noted at its recent annual shareholder meeting that Nike athletes won 190 medals in Rio. 3. GUIDANCE: Nike may offer updated guidance, after forecasting fiscal 2017 revenue in June to be up in the high single digits versus analysts' estimates at the time of $35.52B. Canaccord analyst Camilo Lyon believes Nike will beat estimates for Q1 as guidance was conservative, but sees "several" reasons to be concerned about slowing futures orders. Baird analyst Jonathan Komp expects Nike to report an relatively inline Q1 report and reiterate full year targets. Although the Q1 report may not resolve all concerns, he suspects Nike remains on track to achieve full year targets. Cowen analyst John Kernan also doubts management will alter its guidance of mid-teens earnings growth. 4. FUTURE ORDERS: B. Riley analyst Mitch Kummetz last month downgraded Nike to Neutral and said he expects futures to be flat to down sequentially when Nike reports. Cowen analyst Kernan believes Nike's stock market direction will be determined by gross margin and futures orders movement. 5. NIKE+ APP: Analysts and investors may look for early results of the company's newest Nike+ app and the Apple Watch (AAPL) Nike+, which it has called "the ultimate tool for anyone who runs." The newest Nike+ app is a "personalized service providing consumers with easy access to the best of Nike," the company has said.