Nike (NKE) about to report Q3 2022 earnings: Here’s what to expect

Nike‘s 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 sneaker giant 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 by Refinitiv.

Here are some of the key topics analysts are watching and expecting Nike to address later Monday.

“Our checks suggest Nike’s China business is not recovering as fast as we, or the market, expected,” Sole wrote in a note to clients. Plus, he said, the market has been underestimating the effects of the persistent global supply chain challenges that have delayed manufacturing and shipments, Nike’s temporary suspension of business in Russia, higher oil prices and a rising U.S. dollar that will pressure Nike’s forecast for profits.

Earlier this month, Nike said that given the rapidly evolving situation in Russia, along with increased operational challenges, it paused its business there. At this point, it’s unclear how long that will persist. The company has 116 retail stores in Russia, representing less than 2% of its total sales, according to analysts’ estimates.

“We think Nike’s third-quarter report will cause the market to see the company’s earnings rebound happening later than currently believed,” said Sole.

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.