NEW YORK (TheStreet) -- Shares of Nike (NKE) are rising, up 1.1% to $95.54 in early market trading, ahead of the sporting goods company's fiscal second quarter earnings release after the market closes today.
The world's largest footwear and athletic apparel company is set to announce its quarterly results along with its futures orders -- a metric that shows how much merchandise the company expects to ship in the coming months.
For the company's fiscal second quarter, analysts estimate earnings of 70 cents per share on $7.15 billion in revenue, as Nike predicts a slow-down in momentum.
In the same quarter of last year, Nike reported earnings of 59 cents per share on $6.43 billion in sales.
Nike guided for a high single-digit growth in revenue for the fiscal second quarter after posting a 15% growth in its fiscal first quarter.
Separately, TheStreet Ratings team rates NIKE INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate NIKE INC (NKE) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 26.74% and other important driving factors, this stock has surged by 26.14% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NKE should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- NIKE INC has improved earnings per share by 26.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, NIKE INC increased its bottom line by earning $2.98 versus $2.70 in the prior year. This year, the market expects an improvement in earnings ($3.59 versus $2.98).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry average. The net income increased by 23.3% when compared to the same quarter one year prior, going from $780.00 million to $962.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 16.4%. Since the same quarter one year prior, revenues rose by 14.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- NKE's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, NKE has a quick ratio of 1.70, which demonstrates the ability of the company to cover short-term liquidity needs.
- You can view the full analysis from the report here: NKE Ratings Report