Another Strong Quarter Expected For Nike, Inc. Says Goldman

Goldman Sachs has published a research report on Nike, Inc. NKE in anticipation of the company's 2Q earnings release, scheduled for 12/21. In the report, Goldman Sachs writes "2Q is historically a strong qtr for NKE from an EPS beat/stock reaction perspective as expectations remain in check on the heels of conservative guidance. It is notable that while NKE beat 1Q gross margin significantly, NKE only raised its implied margin guidance for 2Q-4Q slightly. Of the past ten years, NKE beat 2Q eight times by an avg of 7%, and the stock has reacted positively 90% of the time by an avg of 4%. (2) We expect the qtr to highlight the thematic positives that make it attractive at this point in the cycle: (a) global growth: NKE generates more 50% of its sales outside of the US; (b) strong US product cycle: Footwear has been a standout category at retail and data within the athletic segment suggesting that for the first time in well over a year BOTH the key running and basketball segments are seeing strong growth; (c) better execution against big dollar opportunities like apparel: NKE's new focus on style productivity is compelling as similar “Apparel 101” process changes have been a major win for other brands. We are now beginning to see NKE's efforts pay off with North America apparel orders +20% last qtr." Goldman maintains its Buy rating and $97 price target. Nike, Inc. closed yesterday at $87.32.