NIKE(NKE) The Motley Fool·2025-04-02 19:09Core Viewpoint - Nike is experiencing significant challenges, with disappointing fiscal third-quarter results and a forecast for worsening performance in the fourth quarter, leading to a seven-year low in stock price [1][2]. Financial Performance - Revenue in the third quarter decreased by 9% to 0.77 to $0.54 [4]. - Gross margin declined from 44.8% to 41.5% as the company worked to clear inventory of legacy styles [4]. - Management anticipates a further decline of around 14% in performance for the fourth quarter, with gross margin expected to drop by 400 to 500 basis points [4]. Market Dynamics - Nike is losing market share to emerging brands like Deckers' HOKA and On Holdings, contributing to investor impatience with the current turnaround strategy under CEO Elliott Hill [1][2]. - The company is facing macroeconomic pressures, including tariffs and weak consumer discretionary spending, which contributed to a 20% stock loss in March [2]. Growth Areas - Despite overall revenue declines, Nike reported a return to growth in running, particularly with strong demand for the new Pegasus Premium, and growth in Japan and Latin America [5]. - The Asia-Pacific Latin America region showed an overall decline, but specific markets are performing better [5]. Strategic Outlook - CEO Elliott Hill is focusing on reestablishing relationships with wholesale partners and investing in performance products, viewing sports and performance gear as a key brand driver [6]. - Nike maintains a strong position in basketball and has an unmatched roster of sponsored athletes, suggesting potential for recovery [7].