2023 has proved a challenging year for the world’s largest sportswear firm, Nike (NKE:NYSE), due to headwinds from slowing consumer spending and difficulties in the key Chinese market.

Nevertheless, shares in the Oregon-based sneakers star have rallied strongly in recent months meaning Nike needs to deliver some positive news to sustain the momentum when it puts up second-quarter earnings on 21 December.

The outlook heading into the print for the quarter to 30 November, for which analysts are forecasting earnings per share of $0.83 on revenue approaching $13.4 billion, is mixed.

While more upbeat commentaries from key US retail partners including Foot Locker (FL:NYSE) and Dick’s Sporting Goods (DKS:NYSE) instill a measure of confidence, athleisure peer Lululemon’s (LULU:NASDAQ) fourth-quarter revenue guidance fell short of analysts’ estimates raising concerns over the outlook for US consumer spending.

The market reaction hinges on Nike chief executive John Donahoe’s comments around US holiday season demand, the competitive landscape and the outlook for Greater China, as well as Nike’s gross margin and inventory levels.

At the first-quarter results (28 September), Nike reported a modest 2% rise in revenue to $12.9 billion along with an encouraging 10% drop in inventories to US$8.7 billion.

Finance director Matthew Friend said the results demonstrated ‘the impact of staying on the offense over the past fiscal year. With a healthy marketplace and another quarter of brand and business momentum, we are strengthening our foundation for sustainable, profitable, long-term growth.’

US UPDATES OVER THE NEXT 7 DAYS

QUARTERLY RESULTS

December 15: Darden Restaurants, Daily Journal Corp, Gencor

December 18: Heico

December 19: Accenture, FedEx, FactSet Research, Steelcase, FuelCell Energy

December 20: Micron, General Mills, Carnival Corp, Toro, Cal-Maine, MillerKnoll

December 21: Nike, Cintas, Paychex, CarMax, AAR, Blackberry, Apogee, Mission Produce

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