Nike's forecast will be in focus during Q1 earnings
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Nike (NYSE:NKE) is set to report its first-quarter earnings on Thursday, with investors focusing on the athletic apparel retailerâs guidance at a time when inflationary pressure is continuing to impact consumer spending on discretionary items.
Wall Street expects Nike to post Earnings Per Share (EPS) of $0.76, while revenue is expected to rise just 2.4% y-o-y to $13 billion. 
Analystsâ sentiment on the Oregon-based company is conservative, given Nike missed expectations on the EPS line for the first time in three years and set cautious guidance during its fourth quarter results.
âNike remains an undisputed leader but its particularly large exposure to the U.S. market continues to make it more vulnerable in the short term we feel and we are trimming our estimates and target price,â HSBC said.
Jefferies downgraded Nike with analyst Randal Konik saying 87% of US consumers with student debt are concerned about monthly expenses and are likely to reduce spending, with apparel and footwear being the most likely areas of pullback. 
Though Nike posted a 16% rise in revenue in China during the previous quarter, analysts are concerned about its significant exposure to the market in China, given its high volatility.
Over the last three months, EPS and revenue estimates have seen no upward revision, compared to 12 and 15 downward moves respectively.
With Nike also facing inventory challenges, supply chain issues and elevated freight and logistics costs, investors will keep an eye a sharp eye on the companyâs margin.

The sneaker giant, which has a market value of near $138 billion, has lost more than 23% so far this year, while companies including Foot Locker (FL) and Under Armour (UAA) fell 54% and 37% respectively. Lululemon (LULU) has gained 17% this year.


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