NIKE, Inc. (NYSE: NKE ) stock shed about 5% following the company's earnings report , even though Nike managed to beat consensus on both topline and earnings. But sell-side expectations were very low and an earnings beat must haveExperience as an investment analyst for a major BB-Bank, as well as private equity consultant for MBB. Currently working towards the CFA charter, having completed I&II. Passion for risk-assets (Growth, Contrarian, Emerging Market) ex-colleague and close friend of Investor ExpressAn ...

Investors hoping for a turnaround at Nike (NKE -0.94%) will have to wait longer.The world's leading sportswear company posted yet another quarter of declining revenue and profits and told investors that things would get worse in the fiscal fourth quarter, the current period.The quarter marked Nike's fourth straight period of declining revenue as sales fell 9% to $11.3 billion, dragging earnings per share down to $0.54, well below the $0.98 it reported after adjustments in the quarter a year ago. While the r ...

Core Viewpoint - Nike reported better-than-expected earnings and revenue for its fiscal third quarter, but the stock price fell sharply due to management's cautious outlook for the upcoming quarter, indicating potential further declines in revenue and profitability [2][4][6]. Financial Performance - Nike's earnings were $0.54 per share, surpassing analyst expectations of $0.29, but down from $0.77 in the same quarter last year [4]. - Revenue decreased by 9% year over year to $11.3 billion [4]. - Direct-to-consumer sales fell by 12% year over year, while wholesale revenue declined by 7% [5]. Strategic Challenges - The company is undergoing a strategic reset to recover from past decisions made during the COVID pandemic, which included a focus on new styles and a reduction in wholesale partnerships [3]. - Nike is currently working to rebuild relationships with wholesale partners and clear excess inventory, even at the expense of profitability [3]. Management Outlook - Management expects short-term headwinds to worsen in fiscal Q4, with revenue projected to decline in the mid-teens range [6][8]. - Gross profit margin is anticipated to decrease by 400 to 500 basis points year over year [8]. Market Conditions - External factors such as geopolitical dynamics, new tariffs, volatile foreign exchange rates, and tax regulations are contributing to uncertainty in the operating environment, impacting consumer confidence [7]. Investment Sentiment - Despite Nike's strong brand, the current strategic reset and ongoing revenue declines create significant uncertainty, leading to a recommendation for investors to remain cautious and possibly wait for clearer signs of recovery before investing [9].

Core Insights - Nike's stock has significantly declined, down over 30% in the past year and off its peak of over $170 per share from November 2021 [1] - The company is facing challenges in sales and inventory management, with recent earnings reflecting a continued decline [2][7] Sales Performance - Nike's revenue fell 9% to $11.3 billion in the most recent quarter, with Nike brand revenue also down 9% to $10.9 billion [7] - Direct revenue dropped 12% to $4.7 billion, with digital sales contributing to this decline [7] - The Chinese market saw a 17% revenue drop to $1.7 billion, while North America experienced a 4% decline to $3.1 billion [8] Management Changes and Strategies - New CEO Elliott Hill is implementing a "Win Now" action plan to address previous management issues and focus on innovation [5] - The company aims to balance direct and wholesale selling, with an initial focus on the U.S., China, and U.K. for growth [6] Financial Metrics - Gross margin declined by 330 basis points to 41.5% due to increased discounts to clear inventory, leading to a 30% drop in earnings per share (EPS) to $0.54 [9] - Analysts predict further gross margin pressure in fiscal Q4, with expected declines of 400 to 500 basis points [10] Future Outlook - Management anticipates mid-teens revenue decline in fiscal Q4 due to various headwinds, including geopolitical uncertainty and tariffs [11] - A turnaround is expected to take at least a year, but early signs of progress could lead to stock recovery [12][13]

Core Viewpoint - Nike's sales are experiencing a decline across all global markets as the management team faces challenges in mitigating the impact [1] Group 1 - The decline in sales is noted in every part of the world, indicating a widespread issue for the company [1] - The management team is actively working to limit the damage caused by the declining sales [1]

Group 1: Q1 Earnings Overview - The Q1 reporting cycle is not fully underway, with major banks set to report on April 11, but early results from companies with fiscal quarters ending in February show mixed outcomes [1][2] - As of March 21, 14 S&P 500 members have reported February-quarter results, with another five expected to report soon, leading to nearly two dozen results by the time major banks report [2] - Current expectations for Q1 earnings indicate a year-over-year increase of +5.9% on +3.8% higher revenues, following a previous period of +13.8% earnings growth [8][18] Group 2: Company-Specific Performance - Nike's quarterly results initially led to a stock price increase, but investors later realized ongoing recovery challenges, resulting in a loss of gains [3][4] - FedEx reported disappointing results, missing both top and bottom-line expectations, and provided a lower guidance for the third consecutive quarter, indicating ongoing company-specific issues [4] - Lululemon's stock performance has been closely tied to consumer spending trends, with its shares down -15.6% year-to-date, compared to a -4.2% decline for the S&P 500 [12] Group 3: Market Sentiment and Economic Outlook - The market has shown a lack of enthusiasm for early Q1 results, with the percentage of companies beating EPS estimates at the lowest level in the past 20 quarters [13][17] - There has been a significant number of negative revisions to Q1 earnings estimates across various sectors, with the most notable declines in Conglomerates, Autos, and Consumer Discretionary [21][22] - Despite near-term risks, the overall corporate earnings picture has been improving, with expectations for continued growth momentum through 2027 [27][29]

Nike’s shares plummeted Friday as investors grew wary about new CEO Elliott Hill’s turnaround plans after the struggling sneaker giant warned that sales could plunge by double digits.On Thursday, the company reported a 9% sales decline during the all-crucial holiday season quarter,— including a 17% slump in quarterly sales in China — and forecast a steeper-than-expected drop in fourth-quarter revenue.Nike said sales will be down in the “mid-teens range” for the quarter that ends in May in an earnings call. ...

Core Viewpoint - NIKE Inc. reported third-quarter fiscal 2025 results with both revenues and earnings per share (EPS) declining year over year, despite beating Zacks Consensus Estimates for both metrics [1][2]. Financial Performance - EPS for the quarter was 54 cents, a 30% decline from the previous year, but exceeded the Zacks Consensus Estimate of 28 cents [1]. - Revenues decreased by 9% year over year to $11.27 billion, surpassing the Zacks Consensus Estimate of $11.03 billion. On a currency-neutral basis, revenues fell by 7% [2]. - NIKE Direct revenues were down 12% to $4.7 billion, with a 15% drop in NIKE Brand Digital and a 2% decline in NIKE-owned stores [3]. Segment Performance - NIKE Brand revenues totaled $10.9 billion, a 9% decline year over year, affected by decreases across all geographies [5]. - In North America, revenues fell 4% to $4.9 billion, with NIKE Direct down 10% [6]. - EMEA revenues dropped 10% to $2.8 billion, with NIKE Direct down 12% [7]. - Greater China saw a 17% revenue decline to $1.7 billion, with NIKE Direct down 11% [8]. - APLA revenues fell 11% to $1.5 billion, with NIKE Direct dipping 4% [9]. Cost and Margin Analysis - Gross profit declined 16% to $4.7 billion, with gross margin contracting by 330 basis points to 41.5% due to increased discounts and higher product costs [10]. - Selling and administrative expenses decreased by 8% to $3.9 billion, but as a percentage of sales, SG&A expenses increased by 50 basis points to 34.5% [11]. Shareholder Returns - NIKE returned $1.1 billion to shareholders, including $499 million in share repurchases and $594 million in dividends [14]. - As of February 28, 2025, the company had repurchased 119.3 million shares for $11.8 billion as part of its four-year $18 billion share repurchase program [14]. Outlook - For the fourth quarter, management expects revenues to decline in the mid-teens range, with gross margin likely decreasing by 400-500 basis points [16]. - SG&A expenses are projected to increase in low to mid-single digits, while the company continues to manage expenses and invest in demand creation [17].

Core Insights - Nike Inc reported a fiscal third-quarter earnings and revenue beat but expects a significant sales decline in the fiscal fourth quarter due to restructuring, weak consumer confidence, and tariffs [1] - The stock experienced a 7.7% drop, trading at $66.30, marking its fourth consecutive daily loss and the worst single-day percentage drop since June [2] Financial Performance - Nike's shares have a year-over-year deficit of 34.2% and reached a nearly five-year low of $65.18 [2] - At least 10 firms, including J.P. Morgan Securities, have reduced their price targets for Nike, with J.P. Morgan lowering it from $73 to $64 [1] Market Activity - Options trading volume for Nike has surged, with 108,000 calls and 98,000 puts exchanged, which is five times the typical volume [3] - The most popular options contract is the March 65 put, with new positions being opened at the 66 put [3] Sentiment Analysis - The 10-day put/call volume ratio for Nike stands in the 95th percentile of its annual range, indicating a bearish sentiment among short-term options traders [4]

Core Viewpoint - Nike's latest earnings report and management comments indicate a significant decline in stock prices, reflecting challenges in the company's performance and future outlook [1] Financial Performance - Nike's stock price decreased by 8.74% on March 20, 2025, indicating market concerns regarding its financial health [1] Management Insights - Management provided comments regarding the company's future, suggesting a need for strategic adjustments to address current challenges [1]