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Fly News Breaks for March 14, 2018
Mar 14, 2018 | 07:02 EDT
JPMorgan analyst Christopher Horvers says he found a "number of encouraging takeaways" in Dick's Sporting Goods' Q4 results, with the "noteworthy exception" of the comp miss. The analyst highlights the "much better than expected" gross margin performance. Further, he notes that besides Under Armour (UA, UAA), Dick's sees innovation in the pipeline and that its year-end inventory is in the best position since Q4 of 2013. Horvers keeps an Overweight rating on Dick's shares with a $43 price target.
News For DKS;UAA;UA From the Last 2 Days
Sep 25, 2018 | 11:03 EDT
Nike (NKE) is scheduled to report results of its first fiscal quarter after the market close on Tuesday, September 25, with a conference call scheduled for 5:00 pm ET. What to watch for: 1. GUIDANCE: Along with its last report, Nike guided for Q1 revenue growth in the high single digit range, which compares to analysts' current consensus of $9.93B. Nike at the time raised its fiscal 2019 revenue growth view to the high single digit range from the previous guidance of growth in the mid to high single digit range. Analysts currently expect Nike to report FY19 revenue of $39.39B. Revenue momentum appears to be accelerating at the same time that the company's digital transformation could lead to a more efficient operating model, Barclays analyst Matthew McClintock said. Stifel analyst Jim Duffy said his online checks into Q2 raise his confidence that in his above-consensus gross margin expectations ahead of Nike's Q1 earnings report. 2. CONSUMER DIRECT OFFENSE: Last year, Nike announced the "Consumer Direct Offense," a new alignment that "allows Nike to better serve the consumer personally." As part of the new alignment, the company will "deeply" serve customers in 12 key cities, namely New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul, and Milan. Nike has said that the changes will result in an overall reduction of roughly 2% of its global workforce. Wedbush analyst Christopher Svezia said last quarter that growth was broad-based in Q4, North America returned to growth, and key products have been well accepted by consumers, suggesting its 2X and Consumer Direct Offense strategies are working. 3. KAEPERNICK CAMPAIGN: Nike has been in the spotlight after announcing that former NFL quarterback Colin Kaepernick, who sparked controversy by kneeling during the national anthem to protest racial injustice, will be one of the faces of its ad campaign for the 30th anniversary of its "Just Do It" motto. According to Reuters, Nike solid out 61% more merchandise since unveiling the Kaepernick campaign, with research showing that Nike sold out far more items between September 3 and September 13 than in the 10-day period prior to the ad's unveiling. Canaccord's Camilo Lyon said he sees the "campaign as a "stroke of genius" as it accomplished four key things, namely struck an emotional chord with people that incited a conversation, was courageous in that Nike took a stand in support of a social issue where few companies have of late, spoke to its core consumers in a very "Nike-esque" provocative way, and strengthened the ties with its sponsor athletes by showing them that the company stands by them. 4. INCREASED COMPETITION AND PROMOTIONAL ACTIVITY: Nike is under pressure from competitors including traditional players Under Armour (UA, UAA) and adidas (ADDYY), as well as Amazon (AMZN), which now has private-label sportswear available on its site. Nike rival Under Armour last week announced a 3% cut to its global workforce as part of its restructuring plan. Last year, Under Armour approved a restructuring plan to better align its financial resources to support the company's efforts as the consumer landscape shifts, under which it planned to cut about 2% of its global workforce of 15,000 and streamline "all aspects" of the organization to improve business operations. Walmart's (WMT) will sell Nike products and offer more delivery options, starting in its top market of New York City, in an effort to attract affluent, urban consumers and better compete with e-commerce rivals like Amazon, Reuters reported earlier this month.
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