8 Takeaways From Nike's Q4 Results

Since reporting Q1 earnings last week, Nike Inc NKE shares are up 4.6 percent. Baird analyst Jonathan Komp is among those impressed by Nike’s quarter.

8 Things

In a new report, Komp outlined his take on eight important Nike topics following earnings:

1. Consensus fiscal 2017 earnings forecasts, which have fallen to $2.40, are in line with Baird’s outlook.
2. Global futures at FQ4-end of +11 percent were not significantly front- or back-weighted, a positive sign of stability.
3. Management seems satisfied with +6 percent North American futures.
4. Nike seems to be tightening its Always Available business.
5. DTC strength reflects strong demand balance between brick and mortar sales and online sales.
6. Nike’s innovation pipeline is encouraging.
7. Moderation in Western European futures reflect Euro Championship timing and Brexit-related impacts are already reflected in the company’s guidance.
8. North American inventory clearing was the driver behind a 0.26 percent decline in gross margins, and margins are expected to rebound by 0.3–0.5 percent in fiscal 2017.

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“We believe NKE is well-positioned to drive constant-currency EPS increases of 15+ percent and revenue growth in the high single- to low double-digits, while generating attractive returns on capital and free cash flow,” Komp added.

Baird maintains an Outperform rating and a $67 price target for Nike.

Disclosure: The author holds no position in the stocks mentioned.