Sterne Agee is forecasting a Nike Inc. NKE 3Q11 EPS of $1.17 versus consensus of $1.11 and $1.01 LY.
“We are estimating sales of $5.29B (+12% y/y), which incorporates robust growth in China/emerging markets of +20%/25%, respectively, and continued strength in mature markets (N.A. +15%), reflecting a strong product cycle and continued DTC expansion,” Sterne Agee writes.
“SG&A of $1.69B (+8.0%) should lever due to demand creation growth in the HSD range. While gross margin (est: 45.9%, -100 bps), should benefit from clean inventories and the increased penetration of the higher margin DTC and international business, NKE will start to feel pressure from rising product costs.
“NKE expects input cost increases to begin in 3Q11 and continue into 1H12 yet we believe NKE will be able to offset the rising costs using multiple levers which will be discussed below.”
Nike Inc. closed Thursday at $88.18.
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