Nike earnings: Cozying up to consumers in the face of competition from Adidas, Under Armour
Nike Inc. is expected to report fourth-quarter earnings on June 29, just a couple of weeks after announcing a major reorganization that includes a 2% workforce reduction and a focus on enhancing its direct-to-consumer sales. The company’s new alignment will focus on 12 cities, including New York, London and Shanghai, which are expected to represent 80% of the company’s growth through 2020.
Nike NKE, +0.77% plans to bring more innovation more quickly to the consumer, part of a strategy for a “consumer direct offense.” The new Nike Direct organization will combine the website, direct-to-consumer retail and Nike+ digital products to enhance membership.
What To Expect From Nike’s Fourth Quarter Earnings
Nike is set to report its full year earnings for fiscal 2017 on June 29 after market close. The company has seen some tough times in the year so far. Growth in the U.S. has slowed down dramatically of late, while Nike faces rising pressure from rivals such as Adidas and Under Armour, especially in the footwear business.
That said, overall growth has not been hurt much on the back of Nike’s strong presence in international markets. Gains made in China and Europe have managed to offset the domestic slowdown by a large margin. Going forward, we expect to see things turn around in the short term as inventories and demand finally seem to be back in line.
Is Nike Inc (NKE) Stock a Buy or Short Ahead of Earnings?
Nike Inc (NYSE:NKE) is set to report earnings on Thursday after the close. Investors are seemingly torn whether they should be long or short the athletic apparel maker heading into the results. For those that can look past some of the near-term headwinds, they could justify a long position in NKE stock.
Retail has been under fire. There’ve been bankruptcies left and right and all we ever hear about is Amazon.com, Inc. (NASDAQ:AMZN). Indeed, AMZN has been leading the e-commerce crusade to disrupt all things retail. Investors could make a bear case for Nike on this front, but it’s not as bad as it seems.
On the Tape Today | 6-30-17
VTX-Vertex Pharma continues to show solid order flow. Not so much daily momentum but a solid bullish bias. Yesterday's inside day was disappointing from a relative strength perspective, but not shocking because of the recent sector strength. Looking for a breakout of the inside day to start a new swing trade. A $131.75 buy stop triggers the entry, and planning to add to the position on a pause above $136. My ultimate profit target comes in at $145.
Order flow wins again.
Tuesday and Wednesday perfectly illustrated the difference between order flow and momentum. Short-term momentum has very little history, fewer dollars committed to the idea. Momentum has shallow roots.
This is why we make a distinction between trading for cash flow, and planning to build a position or hold longer. Different probabilities demand different trade management. Learn this and you have much less stress between entry and exit. Nothing will frustrate you more than watching a winner melt away, or exiting a winner too soon.
Order flow or momentum? Or both? Know the answer and trade management is easier.
The lesson here? Trading bearish momentum in bullish order flow means trading for cash flow, short holding time and or booking profits into momentum instead of building a position.
Stock Market Today:
Stocks to Trade | 6-29-17 Thursday Edition
Bullish Momentum: EXAS, STLD, X, PYPL, INCY, ALXN, CELG, WDC
Bullish Order Flow: NVDA, PYPL, ALXN, CELG, RH, JPM, CARA, WDC, WDC, AMGN, MU, EXEL, GILD, BABA, MA, C, VRTX, LVS, FSLR, TSO, ADBE, LUV, UNH, AET, MCD, BA, UPS, LLY, CAH, JNJ
Bearish Order Flow: bbby, rspp, hds, tsco, clr, wba, slb, apc, tgt, bhi, fl, nfx, dvn, dltr, hal, hes, slca, tjx, rost
Double Normal Volume: CBI, NTNX, CARA
Inside Day: orcl, baba, schw, txn, tsla, bbby, teva, fast, ctsh, jnpr, nwl, cost, mo, pep, car, adi, twlo, ual, cf, unh, hon, fl, pm, mcd, akam
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