According to Christine Short of Estimize, Nike is expected to announce progress of its partnerships with tech companies, most notably with Apple, during its earnings report tomorrow. “I think of Nike just as much as a tech company as they are an apparel company”, the analyst said, while pointing out that the world’s largest sports gear company is “gradually morphing into something else”.
“They are really just re-positioning themselves to move into the space of wearable technology and smart apparel”, Christine added. Nike, who has recently expanded its global partnerships with companies like Garmin and TomTom to offer runners more ways to map their progress using technology, is now expected to reveal how it will work itself into the Apple Watch. Analysts believe that any positive news on wearable technology would likely compliment what is expected to be a strong Q3 ‘15 for the company.
Wall Street analysts are expecting profits of $0.85 cents a share, an 11.8% jump from the year ago period, while revenues are expected to increase 9.5% to $7.63 billion, according to Yahoo Finance. Another bullish sign for Nike is Footlocker. About 50% of its products come from Nike and its stock is hovering near a record after better than expected fourth quarter results.The stronger U.S. dollar could be a potential wild card for Nike, the stock is little changed year-to-date. However, Short notes the company is able to hedge more efficiently than other multinationals, “If you have a well managed company you can hedge against the stronger dollar.”
Nike will be reporting its quarterly results tomorrow at 4:15pm ET, followed by a 5pm ET conference call.