The earnings calendar will be rather light this week. Market participants will be paying close attention to shoe giant Nike’s results when it reports Tuesday after the closing bell. Nike is expected to report earnings of 58 cents per share on $9.87 billion in revenue during its fiscal third quarter.
Nike was among the first group of retailers to announce store closures in response to the COVID-19 pandemic. The Beaverton, Ore.-based company closed all 384 retail stores in the U.S. from March 16 to March 27. Despite the massive store closures, the company is expected to fare well in the long term, according to Raymond James.
Nike has demonstrated a very impressive performance during prior recessions, a large reason for this performance has been global growth and distribution gains. However, this strength is largely a testament to the idea that good product sells even in bad times, and NKE's history is filled with strong innovation launches of great product.
However, there will likely be pent-up demand to surface following the coronavirus crisis. However, because Nike is a global brand, it will not be immune to the effects of the virus. The company will faces significant challenges related to the Coronavirus. First and foremost, the company likely has a substantial amount of global inventory that hasn't sold and needs to be cleared before new innovation can launch.”
Management’s commentary regarding COVID-19’s impact on business will be critical. Shares of the shoemaker have plunged 33% this year.