Q3 Earnings Are In
Did our predictions hold up?
1st Nov 2018
Q3 Earnings Are In
In our Q2 Digital Strength Index Report, we made predictions about which companies are winning and lagging behind in digital and the implications for their Q3 results. As we’re in the midst of earnings, we decided to take a look back at how well our predictions held up.
NIKE – Nike is putting digital at the center of their growth strategy and shifting their business model to sell directly to consumers and “invent new ways to combine digital and retail”. Nike made our Biggest Movers list in Q2 with an average DSI score of 92, which was a big jump from Q3 2017 where they came in at 59. As a refresher, the DSI score ranks the “digital strength” of a company. Their Q3 earnings beat expectations, despite reporting a weaker than expected gross margin which executives attributed to continued investments in digital. We believe Nike’s continued investment in digital will continue to pay off over the long term.
DUNKIN BRANDS – Dunkin announced third quarter earnings and, as we predicted, beat analyst expectations in both revenue and earnings. Like Nike, Dunkin also made our Biggest Movers List in Q2 with an average DSI score of 98. Their recent decision to drop Donuts from their name has been the topic of much analysis and creative debate . We believe the change and their continued investment in convenient customer experiences will continue to pay off in their future financial performance.
MICROSTRATEGY INCORPORATED – MicroStrategy, an enterprise business intelligence application software provider, reported third quarter earnings that beat EPS expectations, but missed revenue expectations by $4.46M resulting in a 3.1% Y0Y decline. MicroStrategy’s Digital Strength Index has been fluctuating greatly quarter over quarter, with Q2 2018 coming in at its lowest in the last year at 34. Despite being the sole Challenger in Gartner’s 2018 Magic Quadrant for Analytics and BI Platforms, the company faces competition from Microsoft and Tableau who are ranked in the Leader quadrant and also have DSI scores consistently in the top 25%.
These earnings prove, as does the DSI, the importance of the investing in digital. How will these companies fare this last quarter and heading into the New Year? Check back!