Nike Inc. (NYSE:NKE) Q2 Earnings Preview: Just Doing It, Again

Nike Inc. (NYSE:NKE) plans to release its second quarter fiscal 2014 financial results on Thursday, December 19, 2013, at approximately 1:15 p.m. PT, following the close of regular stock market trading hours. Following the news release, NIKE management will host a conference call beginning at 2:00 p.m. PT to review results.

Wall Street anticipates that the sports apparel maker will earn $0.58 per share for the quarter. iStock expects NKE to beat Wall Street’s consensus number. The iEstimate is $0.61.

NIKE engages in the design, development, marketing, and sale of athletic footwear, apparel, equipment, and accessories, as well as in the provision of services to men, women, and kids worldwide. The company offers products in seven categories, including running, basketball, football, men’s training, women’s training, NIKE sportswear, and action sports Under the NIKE and Jordan brand names.

Normally, the Dow Member has no problem running past Wall Street’s consensus earnings estimate. Management has delivered a bullish EPS surprise in 13 of the last 16 quarters with two misses and one on-target result.

The better-than-expected quarterly reports exceeded analysts’ outlook by an average $0.05 with a range of $0.02 to $0.08. Meanwhile, the bearish surprises were $0.10 and $0.02.

As you might expect, NIKE shares usually performed well in the three-days surrounding earnings announcements. In the last four years, NKE shares moved higher 10 times, averaging a gain of 4.98%, and backed up six times with an average loss of -5.57%.

Now, when the “Just Do It” company does run into trouble, warning signs tend to manifest with inventory, currency costs, and sales in China. All three appear to be under control heading into Thursday’s results. Inventory only grew at 1.11% in the last quarter, management has formed the NIKE Trading Company to mitigate currency risk, and slow Chinese sales have been more than offset by robust North American and Western Europe sales.

According to Google Trends, investors could see strong sales, again. While analysts believe the top line will expand by 8.10% and the bottom line by 2% year-over-year (YoY), search volume intensity for “Nike” is up 12.12% YoY.

If Google trends translate, then Q2 revenue would be $6.68 billion, bypassing the street’s high-end view of $6.62 billion. If net margins remain constant quarter-over-quarter (QoQ), then net income would be $747.7 million, which works out to $0.84 per-share. We don’t expect the number to be that strong; although, sales could be close.

Overall: the iEstimate, Nike Inc.‘s (NYSE:NKE) EPS surprise history, financial statements, and Google Trends hint at strong Q2 result. If our Google Trends driven revenue estimate proves to be close to accurate, then Nike shares could be on the move, up, following Thursday’s quarterly profit review.