Nike Faces 2 Major Tests This Week. Earnings Isn't the One To Watch
Yahoo Finance ·
Nike's ( NKE +1.79% ) running business may be on the rebound, but the sportswear giant is definitely limping into its first-quarter earnings report, due out on Thursday. The stock is trading around decade lows heading into the big reveal, and Wall Street is lowering its expectations for a comeback. Last Friday, Bank of America downgraded the stock to underperform and lowered its price target from $47 to $30 due to downside risks to earnings over the next two years. Three other analysts slashed their price targets on the stock on Monday as well, reflecting Nike's decline over the last few months as hopes for a turnaround get pushed further out. Nike told investors that gross margin should begin to inflect in the first quarter after years of challenges, as the company moves past tariffs and benefits from streamlining its inventory, but it's clear the broader industry is struggling. Lululemon just posted dismal results in its earnings report earlier this month, and Deckers and On Holdings are trading down significantly from recent highs on slowing growth as well.
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