Core Viewpoint - Nike's CFO indicated that the company will assess cost-cutting measures as needed to mitigate the impact of tariffs, and due to environmental uncertainties, there will be a moderate reduction in stock buybacks [1] Group 1 - The company is considering cost reduction strategies to address tariff impacts [1] - There is a planned moderate decrease in stock buybacks due to uncertain market conditions [1]

Core Viewpoint - Nike plans to gradually increase prices starting in the fall of 2025 due to rising costs associated with tariffs, which are expected to add approximately $1 billion to total expenses [1] Summary by Relevant Categories Pricing Strategy - Nike will begin implementing price increases in the fall of 2025 [1] Cost Implications - The additional total costs due to tariffs are projected to be around $1 billion [1]

Core Insights - Nike's fiscal fourth-quarter sales and profits declined year-over-year, but the results were better than analysts expected, indicating progress in the company's turnaround plan [1][2] - Revenue fell 12% year-over-year to $11.1 billion, while net income dropped to $211 million, or 14 cents per share, down from $1.5 billion, or 99 cents per share, in the previous year [1] - The results mark the third quarter under CEO Elliott Hill, who took over in October, and the company anticipates improvements moving forward as its portfolio shifts begin to take effect [2] Financial Performance - Revenue for the quarter was $11.1 billion, a 12% decrease from the previous year [1] - Net income decreased to $211 million, or 14 cents per share, compared to $1.5 billion, or 99 cents per share, in the same quarter last year [1] - Despite the decline, both revenue and net income exceeded analyst expectations [1] Market Reaction - Nike shares fell approximately 1% in extended trading following the earnings report [3] - The stock has experienced a 17% decline for the year 2025 up to Thursday's close [3]

Financial Performance - Nike's earnings per share was 14 cents, exceeding the expected 13 cents [1] - Revenue reached $11.1 billion, surpassing expectations of $10.7 billion [1] - North America revenue was $4.7 billion, exceeding expectations [1] - China revenue was $1.4 billion, falling short of the expected $1.5 billion [2] Strategic Initiatives - Nike's CEO Elliot Hill is expected to outline his strategy for future growth during the conference call [2][3] - Nike is reportedly partnering with Amazon, potentially creating a new catalyst for growth [4] - Nike is realigning its business to focus on sports rather than gender, aiming to revitalize core areas like basketball and running [6][7] Forward Guidance - Analysts anticipate quarterly guidance during the conference call, with potential insights into holiday order books and expectations for the next fiscal year [3][4] - Nike acknowledges that current financial results are not satisfactory and anticipates improvement through "win now actions" [5]

Revenue Performance - Full year revenues for NIKE, Inc. were $46.3 billion, down 10% on a reported basis compared to the prior year[5] - Fourth quarter revenues were $11.1 billion, down 12% on a reported basis and down 11% on a currency-neutral basis[6] - Revenues for the NIKE Brand were $44.7 billion, down 9% on a reported and currency-neutral basis, driven by declines across all geographies[9] - Total revenues for NIKE, Inc. decreased by 12% to $11,097 million for the three months ended May 31, 2025, compared to $12,606 million for the same period in 2024[18] - For the twelve months ended May 31, 2025, total revenues were $46,309 million, down 10% from $51,362 million in the previous year[18] - Footwear sales in North America dropped by 13% to $3,104 million for the three months ended May 31, 2025, and also decreased by 13% to $12,684 million for the twelve months[18] - Sales through NIKE Direct fell by 13% to $18,783 million for the twelve months ended May 31, 2025, compared to $21,519 million in the previous year[20] - Sales to wholesale customers for the twelve months ended May 31, 2025, were $25,883 million, a decrease of 7% from $27,758 million in the previous year[20] - The Greater China region experienced a significant decline, with footwear sales down 21% to $1,074 million for the three months ended May 31, 2025[18] Profitability and Earnings - Net income for the fourth quarter was $0.2 billion, down 86%, with diluted earnings per share at $0.14, also a decrease of 86%[9] - Earnings before interest and taxes (EBIT) for the total NIKE brand decreased by 58% to $894 million for the three months ended May 31, 2025, and by 34% to $5,740 million for the twelve months[22] - The EBIT margin for NIKE, Inc. was 2.7% for the three months ended May 31, 2025, down from 13.3% in the same period last year[22] - Diluted earnings per share (EPS) for the three months ended May 31, 2025, was $0.99, compared to $3.73 for the same period in 2024[24] Expenses and Corporate Financials - Gross margin for the fourth quarter decreased 440 basis points to 40.3%, primarily due to higher discounts and changes in channel mix[5] - Selling and administrative expenses increased 1% to $4.1 billion in the fourth quarter, with demand creation expense up 15% to $1.3 billion[6] - Corporate expenses increased, with a net loss of $625 million for the three months ended May 31, 2025, compared to a loss of $559 million in the same period last year[22] Shareholder Returns - In fiscal 2025, the company returned approximately $5.3 billion to shareholders, including $2.3 billion in dividends, up 6% from the prior year[8] Taxation - The effective tax rate for the fourth quarter was 33.6%, compared to 13.1% for the same period last year[9] Assets - As of May 31, 2025, total assets for NIKE, Inc. were $36.6 billion, down 4% from the prior year[16]

Core Viewpoint - Nike is set to report earnings, with expectations of a gain of $0.12/share on $10.67 billion in revenue, while the Whisper number suggests a gain of $0.21/share [3] Financial Performance - Nike's earnings have fluctuated over the past few years, with earnings per share (EPS) of $1.84 in 2020, $3.56 in 2021, $3.75 in 2022, $3.23 in 2023, and projected EPS of $3.95 in 2024, $2.15 in 2025, and $1.85 in 2026 [4] - The stock has a price to earnings (P/E) ratio of 20, which is 0.8x lower than the benchmark S&P 500 [4] Market Sentiment and Technical Analysis - The stock is currently in a long downtrend and trading below its 200-day moving average, indicating a potentially unhealthy market position [6] - The relative strength (RS) rating of the stock is only 14, suggesting very low market performance [6] Tariff Impact - The upcoming earnings report may address the impact of tariffs, as Nike imports its sneakers from abroad, which could significantly affect future guidance [5]

Economic Data Summary - Initial Jobless Claims decreased by 9,000 to 236,000, marking the lowest level since mid-May [2] - Continuing Claims reached 1.974 million, the highest level since mid-November 2021, remaining above 1.9 million for five consecutive weeks [2][3] - Q1 GDP was revised down to -0.5%, the weakest quarter since Q1 2022, with consumption growth cut from +1.2% to +0.5% [4] - Durable Goods Orders surged by 16.4%, significantly exceeding the anticipated 7%, driven by a 234% increase in non-defense aircraft orders [6] - The Advanced U.S. Trade Balance for May worsened to -$96.6 billion, with exports falling by 5.2% [7] - Advanced Retail Inventories increased by 0.3% month over month and 3.2% year over year, while Wholesale Inventories decreased by 0.3% [8] Company Insights - Nike is expected to report fiscal Q4 results with an anticipated earnings decline of 88% year over year and a 15% drop in revenues, despite a history of beating earnings estimates [10]

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Core Viewpoint - Nike, Inc. is expected to report a significant decline in quarterly earnings and revenue for the fourth quarter compared to the previous year [1] Financial Performance - Analysts predict Nike will report earnings of 13 cents per share, down from 99 cents per share in the same quarter last year [1] - Projected quarterly revenue is $10.72 billion, a decrease from $12.61 billion a year earlier [1] Analyst Ratings and Price Targets - Nike has beaten revenue estimates in two consecutive quarters and in six of the last ten quarters overall [2] - Evercore ISI Group analyst Michael Binetti maintains an Outperform rating but has reduced the price target from $97 to $75 [4] - Deutsche Bank analyst Krisztina Katai maintains a Buy rating with a reduced price target from $77 to $71 [4] - Barclays analyst Adrienne Yih holds an Equal-Weight rating and has cut the price target from $60 to $53 [4] - Morgan Stanley analyst Alex Straton also maintains an Equal-Weight rating, lowering the price target from $70 to $61 [4] - Wells Fargo analyst Ike Boruchow maintains an Equal-Weight rating and has raised the price target from $55 to $60 [4]

Core Insights - The upcoming Q2 earnings cycle is anticipated to gain momentum with major banks reporting, but several companies, including NIKE, are already releasing results, contributing to the overall Q2 performance [1] - NIKE's stock has declined 18% in 2025, significantly underperforming the S&P 500 [1] Company Performance - Initial tariff announcements negatively impacted NIKE's profitability outlook, contributing to its poor performance [3] - Analysts have shown modest positivity regarding NIKE's upcoming earnings release, with the Zacks Consensus EPS estimate at $0.11, a slight increase since early April [4] - Revenue expectations for NIKE are set at $10.6 billion, reflecting a minor increase of 0.3% [4] - Despite some stability in revisions, NIKE is expected to see an 89% drop in EPS and a 15% decrease in sales, indicating ongoing demand challenges and profitability issues [5] - NIKE is scheduled to report quarterly results on June 26th, with weak demand trends post-pandemic being a significant concern [7] Financial Metrics - NIKE's gross margin has decreased by 330 basis points year-over-year, reflecting pressure from higher costs [10] - The stock is currently trading at a forward 12-month earnings multiple of 31.3X, above its five-year median of 30.7X and higher than the Zacks Apparel industry average [12] - The PEG ratio stands at 2.1X, consistent with the five-year median, compared to the industry average of 1.1X [12] Peer Comparison - Birkenstock (BIRK) has experienced positive EPS revisions and strong demand across its product lines, contrasting with NIKE's struggles [15] - Birkenstock has increased its revenue guidance and reported double-digit sales growth across all segments, with gross margin expanding from 56.3% to 57.7% [16] - While NIKE's outlook remains negative with a Zacks Rank of 4 (Sell), Birkenstock holds a Zacks Rank of 2 (Buy), indicating healthier demand trends and margin expansion [19]