Why Nike (NKE) Will Beat Revenue Estimates

4. Renewed focus on its core brand
Over the last several years, Nike brought several new brands under its umbrella, which distracted management from ramping its core business and focusing on its own brand’s global growth potential. It’s encouraging to see Nike sell off these underperforming entities and consolidate its efforts. In Nov. 2012, Nike completed a sale of certain assets of Umbro to Iconix Brand Group for $225 million and sold all of Cole Haan to Apax Partners for $570 million. These moves should allow Nike to concentrate on NIKE, Inc. (NYSE:NKE) and continue to evaluate Converse and Hurley, to see if these subordinate brands make continued sense. Addidas, like Nike, has brought other large apparel and sneaker brands underneath its watch and is learning the difficulties of managing these holdings. On Mar. 7, Addidas blamed a $356 million fourth-quarter loss on a weakening Reebok brand and a lack of transparency into growth assumptions for the subsidiary.

With improvements in consumer confidence and future customer orders, healthy operating margins and a renewed focus on its own NIKE, Inc. (NYSE:NKE) brand, Nike should be able to beat I/B/E/S third quarter revenue estimates of $6.1 billion. If Nike can capture just a 2% uptick in total revenue as compared to the third quarter of 2012, the Beaverton company will post more than $6.3 billion in top-line revenue and send shares higher into its final quarter of 2013.

The article Why Nike Will Beat Revenue Estimates originally appeared on Fool.com and is written by Julian Willis.

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