* Reports Q3 2019 results on Thursday, March 21 after market closure
* Income forecast: $ 9.6 billion
* Expected expectation: $ 0.64
Nike & # 39; s (NYSE 🙂 powerful rally this year shows that investors strongly believe in & # 39; the world's biggest growth moment for sportswear. And there is a small reason to doubt their faith.
The company has shown revenue growth in its two main markets: China and North America. During the second quarter, which ended on November 30, Nike posted the 18th consecutive quarter of growth in China, & # 39; the world's most populous country, which turned out to be Nike & # 39; s fastest growing product. This gives a strong indication that Nike products have so far remained isolated from the slowing Chinese economy and trade dispute with the US
The most recent proof of this power is expected tomorrow, when Nike reports its third quarter earnings. Analysts expect an average of $ 0.64 earnings per share with revenue growth of 7% to $ 9.6 billion.
And, high on top of this robust expansion, Nike shares have risen by nearly 20% this year, rising to 33.5% in the last 12 months.
Nike Weekly Chart
On a domestic level, the company has been able to revive revenue growth, helped by strong consumer demand, job gains and tax cuts that increased retail spending. But this positive macro environment is not the only reason why Nike is doing well. The company's recent efforts to restructure its activities, with an emphasis on its largest markets and the renewal of its online activities, are also bearing fruit.
Nike & # 39; s Triple Double Push pays off
As part of the "Triple Double" campaign, the company is doubling its resources for its digital properties, accelerating innovation and product creation and deepening individual connections. The result of these efforts is that Nike gains a larger market share from its main European rival, Adidas (OTC :), even in its home market, while performing better in Asia's key growth markets.
Encouraged by these positive undercurrents, the Beaverton, Oregon-based company boosted its outlook for both revenue growth and gross margin during its December 2nd quarter income conference. Nike said it now expects currency-neutral sales to be in the high single-digit figures for the entire year.
This positive momentum is a good omen for the loyal investors of Nike, who have relied on the company's dividend payments and understand the cyclical nature of its business. Nike shares currently pay $ 0.22 per quarter on a quarterly basis, which translates into an annual dividend yield of 1%.
That yield clearly does not look attractive in comparison with other high-yielding stocks in the market. But analyzing stocks based on their returns is not a good approach. The best dividend stocks are those whose payouts are regularly increased. Nike has walked his payout for 15 consecutive years.
Bottom Line
Trading near a record high, Nike stock had a great run last year, which seems to continue if the economy remains favorable. If you already have a Nike inventory, we see no reason to sell them now. The company has succeeded in creating a new growth momentum through its corporate restructuring. For new investors, however, it is better to wait for a more lucrative entry point to take a long-term position in this great brand.
