After today’s market close, we’ll hear from both Micron (MU)  and Nike (NKE) . Even though the portfolio isn’t involved in either of those shares, several factors, including the weakening PC market, dollar strength, ongoing supply chains, and slowing consumer spend, will have us paying close attention to what both have to say about the balance of 2022.

Let’s look at each here:


Micron is expected to deliver earnings per share of $1.30 on revenue of $6.68 billion for its latest quarter and guide it current November one to $0.64 in EPS on $5.62 billion. Prices have continued to weaken for computer memory following Micron’s late June comments for weakening consumer demand and inventory-related headwinds. In early September Micron commented those headwinds were now across most of its market segments, and shared it saw “significant revenue and margin decline in the November quarter” as inventories continued to rise. Those latest comments were made almost 30 days ago, and we’ll be looking for updated ones this afternoon. As we read between the lines, we’ll be thinking about implications for the portfolio’s remaining position in AMD (AMD)  shares.


Turning to global footwear and apparel company Nike, over the last few months, EPS expectations for its August quarter have fallen to $0.92 from $1.19 due to the combination of renewed China lockdowns, dollar headwinds, and weakening consumer spending. Those factors have also led to consensus expectations to fall to $0.73 from $0.95 for its current quarter. Reports suggest Nike could become even more aggressive in working through its excess inventory, which means we’ll be closely watching its margin and profit guidance for the November and February quarters.

What’s said by this global powerhouse will have implications for other apparel companies as well as their retail partners. One potential positive to come out of any additional and aggressive inventory actions by Nike and others is how they influence upcoming sequential Consumer Price Index data.

AAP is long AMD.


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