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Company Overview - NIKE, Inc. has a market cap of $99.2 billion and is a global leader in athletic and casual footwear, apparel, equipment, and accessories for all demographics [1] Upcoming Earnings - NIKE is set to announce its fiscal Q2 2026 results on December 18, with analysts predicting an adjusted EPS of $0.37, a decline of 52.6% from $0.78 in the same quarter last year [2] - For fiscal 2026, analysts forecast an adjusted EPS of $1.67, down 23.6% from $2.16 in fiscal 2025, but expect a significant rebound to $2.57 in fiscal 2027, representing a 55.8% year-over-year increase [3] Stock Performance - Over the past 52 weeks, NIKE shares have dropped 13.8%, underperforming the S&P 500 Index's nearly 12% return and the Consumer Discretionary Select Sector SPDR Fund's 2.1% rise [4] Recent Results - Following its Q1 2026 results, NIKE shares rose 6.4% as overall revenue reached $11.7 billion, a 1% year-over-year increase, with footwear sales of $7.4 billion exceeding estimates [5] - Apparel growth was strong at 9%, totaling $3.3 billion, and wholesale revenue grew by 7%, which helped mitigate weaker Nike Direct sales [5] - The gross margin was reported at 42.2%, surpassing expectations, despite a 31% decline in net income to $727 million [5] Analyst Sentiment - Analysts maintain a cautiously optimistic view on NIKE stock, with a "Moderate Buy" rating overall; among 35 analysts, 17 recommend "Strong Buy," 4 "Moderate Buy," 12 "Hold," and 2 "Strong Sell" [6] - The average analyst price target for NIKE is $82.04, indicating a potential upside of 24.2% from current levels [6]

Nike investors will look for signs this week that the recovery glimpsed last quarter is sustainable and that a bigger marketing budget is helping the sportswear maker claw back market share lost to ni... ...

Core Insights - Nike is expected to report quarterly earnings after market close on Thursday, with significant stock movement anticipated following the results [1][8] - Current options pricing indicates that Nike's stock could swing up to 7% in either direction by the end of the week, with a potential high of around $72 and a low of $62 [2] Financial Performance - Nike's shares are down approximately 11% year-to-date, despite a recovery from April lows following tariff announcements [3] - The company previously reported sales estimates exceeding expectations but noted that ongoing tariff uncertainties negatively impacted profits, with an annual cost projection of $1.5 billion due to tariffs [4] - Analysts project earnings per share of $0.38 for the fiscal second quarter, a decline of about 50% compared to the previous year, with revenue expected to fall 1% year-over-year to $12.23 billion [5] Future Outlook - The third-quarter revenue outlook is considered a key metric for assessing Nike's progress towards consistent growth, with a consensus estimate of $11.46 billion, reflecting a nearly 2% increase from the same period last year [6] - Among 13 analysts, eight have a "buy" rating on Nike's stock, with a mean target price of approximately $82, which would be the highest level since February [7]

Core Viewpoint - NIKE Inc. is expected to report a decline in both revenue and earnings for the second quarter of fiscal 2026, reflecting ongoing challenges in the market and strategic transitions [2][3][18]. Financial Performance - The Zacks Consensus Estimate for NIKE's fiscal second-quarter revenues is $12.2 billion, indicating a 1.7% decline year-over-year [3]. - The estimated earnings per share for the same quarter is 37 cents, representing a significant decline of 52.6% from the previous year [3]. - In the last reported quarter, NIKE achieved an earnings surprise of 81.5%, beating the consensus estimate by an average of 53.7% over the trailing four quarters [4]. Strategic Initiatives - NIKE's "Win Now" strategy aims to restore brand energy and position the company for sustainable growth after a period of underperformance [6][17]. - The company is focusing on disciplined execution, supply-chain optimization, and strategic pricing to enhance margin recovery [10][17]. Regional Performance - North America remains NIKE's strongest region, with projected revenues of $5.2 billion for the second quarter, reflecting a modest growth of 0.5% year-over-year [8]. - In EMEA, revenues are expected to rise by 1.7%, while Greater China is projected to see a decline of 12.7% in revenues, amounting to $1.5 billion [9][11]. Margin and Cost Pressures - NIKE anticipates a gross margin decline of 300-375 basis points, influenced by higher tariffs and increased promotional activity [12][13]. - SG&A expenses are expected to rise in the high-single digits due to increased demand creation investments [12][13]. Stock Performance and Valuation - NIKE shares have decreased by 6.2% over the past three months, underperforming the industry and the S&P 500 [14][15]. - The current P/E ratio of 31.47X exceeds the industry average of 28.06X and the S&P 500's average of 23.35X, indicating a potentially pricey valuation [16]. Long-term Outlook - NIKE's strategic initiatives are designed to strengthen its competitive position and drive long-term growth, despite facing near-term challenges [17][19]. - The company is navigating a difficult demand environment, particularly in lifestyle categories and Greater China, which may impact short-term performance [18][20].

Core Insights - Nike Inc is expected to report a significant decline in earnings per share (EPS) of 52.6% and a slight revenue decrease of 1.7% for the fiscal second quarter [1][6] - The company is experiencing growth in North America and the EMEA regions, driven by wholesale gains, pricing discipline, and effective inventory management [2][6] - Challenges in the Chinese market, higher tariffs, and margin strain are testing Nike's "Win Now" turnaround strategy [2][3][6] Financial Metrics - Nike's price-to-earnings (P/E) ratio is approximately 34.23, indicating a strong investor willingness to pay for earnings [5] - The price-to-sales ratio stands at about 2.14, while the enterprise value to sales ratio is around 2.22, reflecting the company's valuation relative to its sales and cash flow [5] Market Performance - The stock has declined approximately 10% in 2025, with investors remaining cautious due to previous warnings about weak holiday sales [3] - Historically, Nike's stock has shown resilience, rising after its last two earnings reports and breaking a six-quarter losing streak in June, with an average next-day movement of 9.1% [4]

Core Viewpoint - Nike Inc. is facing a challenging financial landscape as it prepares to report second-quarter fiscal 2026 earnings, with CEO Elliott Hill indicating that the path to recovery will not be straightforward [1] Group 1: 'Win Now' Strategy - Nike's 'Win Now' strategy, focusing on Running, North America, and Wholesale, has shown early success, with the Running category increasing over 20% in the first quarter due to revamped franchises like the Pegasus and Vomero [2] - The spring wholesale order book is up, indicating that retail partners are regaining confidence in the brand [2] Group 2: Revenue and Supply Challenges - Management has intentionally reduced the supply of classic franchises such as the Air Force 1 and Dunk to maintain brand health, which has negatively impacted immediate revenue [3] - Organic digital traffic has slowed by double digits as promotional activities have been limited [3] Group 3: Financial Headwinds - For the second quarter, management expects revenue to decline in the low single digits and gross margins to contract significantly by 300 to 375 basis points [4] - Tariffs are projected to cost the company $1.5 billion annually, compounded by a 10% revenue decline in Greater China last quarter [4] Group 4: Analyst Sentiment - Analysts at Raymond James express caution, noting that a stock re-rating is unlikely until there is a clearer inflection in revenue and EBIT% [5] - Stifel maintains a 'Hold' rating, highlighting that shares are trading at a premium of approximately 25 times FY27 earnings, suggesting that the market has already priced in a recovery that has not yet fully materialized [6] Group 5: Stock Performance - NKE shares fell 0.97% to $67.12, but have increased by 8.43% over the last six months; however, the stock has declined by 11.3% year-to-date [7] - The stock exhibits a weaker price trend over the medium and long term but shows a strong trend in the short term, with a poor quality ranking [7]

Group 1: Retail Performance - Retail sales in China for clothing, shoes, and textiles showed a cumulative year-on-year growth of 3.5% from January to October 2025, maintaining a low single-digit growth rate, with October's textile retail sales growing by 6.3% year-on-year, likely influenced by seasonal consumption trends [1] - From January to November 2025, China's exports of textiles, clothing, and footwear decreased by 3.3% year-on-year to $305.5 billion, with a declining trend since March; however, textile exports turned positive in November, and the decline in clothing and footwear exports narrowed month-on-month [1] - The CITIC Textile and Apparel Index increased by 15.1% from January to November 2025, underperforming the Shanghai Composite Index by 0.9 percentage points, ranking 18th among 30 sectors in the CITIC first-level industry comparison [1] Group 2: Manufacturing Insights - Global apparel retail performance is mixed, with moderate growth in the UK and US, while Japan remains under pressure; US apparel retail inventory is stable, and the decline in wholesale inventory has narrowed [2] - Nike's revenue for FY2026 Q1, ending August 2025, showed a reduced year-on-year decline of 1% at constant exchange rates, indicating a potential turnaround in operations, with signs of recovery in North America and core categories like running [2] - The easing of trade relations between China and the US and the reduction of tariff impacts may enhance the certainty of manufacturing orders, with a continued trend of global capacity layout among textile and apparel manufacturers to meet supply chain risk diversification needs [2] Group 3: Brand and Market Trends - Domestic sports brand revenue growth showed a declining trend from Q1 to Q3 2025, yet most sports companies still achieved positive growth, demonstrating resilience amid consumer pressure; brands like Descente, KOLON, and Saucony experienced rapid revenue growth [3] - The outdoor market in China is expanding, with a compound annual growth rate of approximately 13.8% expected from 2019 to 2024, reaching a market size of about 102.7 billion yuan in 2024, with domestic brands growing at a compound rate of about 17.8% [3] - The upcoming Milan Winter Olympics is anticipated to boost winter sports activities, while brands that meet consumer demands for safety and comfort in products like cotton soft towels and sanitary napkins are expected to gain market share [3]

Group 1 - The S&P 500 Index's dividend yield has fallen to levels not seen since the late 1990s, raising concerns about a potential AI bubble similar to the dot-com bubble [1] - Nike's current dividend yield stands at 2.4%, which is double that of the average S&P 500 Index constituent [2][1] - Despite gradually increasing dividends, Nike's stock has significantly declined, trading at just over a third of its peak value from late 2021 and facing a potential fourth consecutive year of losses [3][4] Group 2 - Nike's turnaround strategy under CEO Elliot Hill includes a focus on innovation, adjustments to market strategy, and structural cost cuts, which may pressure near-term profitability but aim to enhance long-term growth and margins [5][4]

Core Viewpoint - NIKE Inc. is expected to report a decline in both revenue and earnings for the second quarter of fiscal 2026, with revenues projected at $12.2 billion, a 1.7% decrease year-over-year, and earnings per share estimated at 37 cents, reflecting a 52.6% decline from the previous year [1][2][10] Financial Performance - The Zacks Consensus Estimate indicates a revenue drop to $12.2 billion and earnings of 37 cents per share for the fiscal second quarter, marking a significant decline from the prior year [2][10] - In the last reported quarter, NIKE achieved an earnings surprise of 81.5%, exceeding consensus estimates by an average of 53.7% over the last four quarters [3] Earnings Expectations - NIKE has an Earnings ESP of -3.79% and a Zacks Rank of 3, suggesting that the likelihood of an earnings beat is low for this quarter [4] - The company is facing challenges in the Sportswear segment due to the deliberate phase-out of aging franchises, which is expected to create revenue softness [11] Regional Performance - North America remains NIKE's strongest region, with projected revenues of $5.2 billion for the second quarter, indicating a modest 0.5% year-over-year growth [7] - In EMEA, revenues are expected to rise by 1.7% as inventory levels normalize and the focus shifts to profitability [8] - Greater China is projected to see a significant revenue decline of 12.7% year-over-year, with revenues estimated at $1.5 billion, reflecting ongoing structural weaknesses [12] Margin and Cost Management - NIKE anticipates a gross margin decline of 300-375 basis points, influenced by higher tariffs and increased promotional activity [13] - SG&A expenses are expected to rise in the high-single digits due to increased demand creation investments [14] Stock Performance and Valuation - NIKE shares have declined by 6.2% over the past three months, underperforming the industry and the S&P 500 [15] - The current stock price of $67.78 reflects a 29.6% increase from its 52-week low but is 17.8% below its 52-week high, with a forward P/E ratio of 31.47, higher than industry and S&P averages [19] Strategic Initiatives - NIKE's "Win Now" strategy aims to restore brand energy and position the company for sustainable growth, focusing on operational resets and improved wholesale partnerships [5][21] - The company is adapting to market dynamics through innovation-led product launches and enhanced consumer engagement [21][23] Challenges Ahead - The company faces near-term challenges, including weak demand in lifestyle categories, elevated SG&A costs, and the impact of new U.S. tariffs [24] - Management's cautious outlook highlights the difficulty in balancing short-term financial pressures with long-term strategic goals [22][24]