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Earnings preview: Can Nike keep its lead ahead of the pack?

Beth Gaston Moon — Mon, 25 Jun 2007 15:20:00 EST

Filed under: Earnings Reports, NIKE, Inc'B' (NKE)

Sprinting into the earnings confessional tomorrow after the closing bell sounds is Nike Inc. (NYSE: NKE), the ubiquitous maker of stylish kicks and apparel for fitness-and-fashion-minded folks. According to Briefing.com, analysts with Reuters are expecting the king of the "swoosh" to bank 85 cents per share in its fourth quarter; analysts polled by Zacks expect 86 cents; both projections exceed year-ago estimates of 69 cents per share.

Technically speaking, Nike has been in rally mode since last August, gaining more than 45% in slightly more than 10 months. The stock has benefited from support at its 10-week and 20-week moving averages; while last week's broad-market pullback dropped the stock below these short-term trendlines, Nike has risen 3% today to retake control of these supportive averages.

My mentor Bernie Schaeffer has taught me to always gauge investor and analyst expectations ahead of an earnings release, as inflated expectations can lead to a disappointing reaction following the report. It seems as though optimism is running fairly high on the footwear retailer. Options players are showing a preference for call positions, which means a sense of bullishness, especially among short-term speculative players. Short interest is low -- the latest numbers show a short-interest ratio of just 2.1 days to cover despite a 19% jump in NKE shorted shares. Finally, analysts are already favoring the bullish camp. Recent Zacks data indicates six "buy" ratings and two "holds," leaving precious little room for upgrades.

It is true that Nike's recent uptrend provides some justification for this optimism. But when expectations are bloated, there is the concern that earnings will not be well received, even if they manage to match or exceed analysts' estimates.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

Earnings preview: Can Nike keep its lead ahead of the pack? originally appeared on BloggingStocks on Mon, 25 Jun 2007 15:20:00 EST. Please see our terms for use of feeds.

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Profit drops at Williams-Sonoma

Beth Gaston Moon — Wed, 30 May 2007 10:23:00 EST

Filed under: Earnings Reports, Bad News, Competitive Strategy, Target Corp. (TGT)

Williams-Sonoma, Inc. (NYSE: WSM), parent of the Pottery Barn chain of home furnishings as well as the eponymous kitchen-goods retailer, said this morning that a challenging sales environment resulted in falling profits.

The firm's first-quarter net income slid lower to $18.2 million, or 16 cents per share, from $23.1 million, or 20 cents per share, in the year-ago period. On the plus side, the latest results were above analysts' expectations of 13 cents per share.

Sales edged up 2.7% during the three-month period to $816.1 million.

WSM Chief Executive noted that company officials remain cautious for the future, noting "higher inventory levels" among competitors and "rising raw material costs."

Continue reading Profit drops at Williams-Sonoma

Profit drops at Williams-Sonoma originally appeared on BloggingStocks on Wed, 30 May 2007 10:23:00 EST. Please see our terms for use of feeds.

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Bad news, good news for Anheuser-Busch

Beth Gaston Moon — Tue, 22 May 2007 11:42:00 EST

Filed under: Earnings Reports, Anheuser-Busch InBev (BUD)

Brewing giant Anheuser-Busch (NYSE: BUD) said today that 2007 earnings per share will exceed long-term growth projections of 7% to 10%, but not before second-quarter results miss estimates.

While second-quarter earnings-per-share growth is expected to fall shy of this projected range, profit gains are expected to ramp up during the second half of the year. In the current quarter, analysts expect earnings of 90 cents per share, a nine-cent (11%) improvement over year-ago results. For the full year, the Street is targeting per-share results of $2.82 per share, another 11% gain.

The company, which has a theme-park enterprise under its corporate umbrella as well as brand names Budweiser, Michelob, and others, didn't give any specific numbers or reasons why second-quarter earnings have struggled. Anheuser-Busch officials did note, however, that sales to retailers have rebounded in May on the heels of a disappointing April.

It's a good thing the future looks bright for Anheuser-Busch, as this second-quarter setback is the second bit of bad news for the company in the past few weeks. In late April, the St. Louis-based suds firm missed earnings estimates and reported a slight dip in market share.

Investors seem to be focused on the future today, as the shares have made modest gains. And at least the company is still winning in the battle of the "light" beers ...

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

Bad news, good news for Anheuser-Busch originally appeared on BloggingStocks on Tue, 22 May 2007 11:42:00 EST. Please see our terms for use of feeds.

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