Nike’s (NYSE:NKE) post-earnings comments Monday could be a harbinger of how the retail industry is being affected by the war in Ukraine, sky-high oil prices and inflationary pressures that threaten to curtail consumer spending.
The “Just-do-it” company is set to report its results for the fiscal third quarter after the market closes. Nike’s exposure to China is also under a microscope, as the United States may choose to impose consequences if Beijing helps Russia wage its war against Ukraine and Western brands face continued boycotts throughout Asia.
Nike shares have traded down in recent weeks, as investors anticipate the retailer taking a hit from some of the aforementioned risks. The stock closed Friday at $131.24, down 21% year to date, compared with the S&P 500′s decline of 6%, and off a 52-week high of $179.10. Still, some analysts say shares can fall even further.
Nike is expected to report 2022 fiscal third-quarter revenue of $10.6 billion, on earnings of 71 cents per share, according to a survey of analysts.
The company has 116 retail stores in Russia, representing less than 2% of its total sales, according to analysts’ estimates.
Analysts polled by Refinitiv see Nike’s total sales growing 2.3% in the fourth quarter compared with a year earlier. For fiscal 2023, Wall Street anticipates Nike’s sales will amount to $53 billion, up 13% from the prior year.
NKE shares faded 37 cents to $130.88.