By Ananya Mariam Rajesh and Granth Vanaik
(Reuters) – Nike is expected to report a rise in third-quarter revenue and grow its market share through 2023, helped by major rival Adidas’ split with designer and rapper Kanye West that caused the German company to lose about $600 million in quarterly sales.
Nike is also expected to get a boost from higher sales of its Jordan Retros and some newer launches as the world’s No. 1 sportswear maker stays ahead of rivals through its innovative product lines.
“There is an opportunity for Nike to pick more market from Adidas,” said Jessica Ramirez, senior analyst at Jane Hali and Associates, adding that Adidas has not had as many bestsellers as Nike.
Adidas cut ties with West in October after his antisemitic comments, causing the company to slash its 2022 dividend and warn of a first annual loss in three decades this year.
Nike has also doubled down on its product lines such as the LeBron 20s and Nike Mercurial shoes, while also grabbing a bigger chunk of the growing China market.
Telsey Advisory Group’s Cristina Fernandez said that China is one market where Nike has significantly outperformed Adidas as it is in a much better position with inventories in the region, and has more localized products.
Still, Nike’s margins are expected to be squeezed in the quarter as it continues to offer promotions and discounts to shed excess stock.
** Nike is expected to report third-quarter revenue of $11.47 billion, a 5.5% rise from a year earlier, according to analysts polled by Refinitiv
** Q3 profit per share is expected to be 55 cents
** Nike will report Q3 earnings on March 21 after markets close
WALL STREET SENTIMENT
** Nike shares have declined nearly 7% in the last 12 months
** The current average rating of 39 analysts on Nike stock is “buy”, with 25 rating it “buy” or higher – Refinitiv
** The median price target is $132, with at least 10 brokerages raising their PTs since January
(Reporting by Ananya Mariam Rajesh and Granth Vanaik in Bengaluru; Editing by Aishwarya Venugopal and Vinay Dwivedi)