Were Nike's Q4 Results Good Enough to Rebound Its Stock?

Core Viewpoint - Nike's stock has experienced significant declines over the past few years, with a 17% drop in 2025 and a 44% decrease over the last three years, underperforming the S&P 500 and rival Adidas [1][3]. Group 1: Q4 and Full Year Results - Nike reported Q4 sales of $11.1 billion, exceeding the Zacks Consensus of $10.71 billion, but this represented a 12% decline from $12.6 billion in the same quarter last year [3]. - The company's net income for Q4 was $211 million, or $0.14 per share, surpassing EPS expectations of $0.12 but down 86% from $1.01 per share in the prior year quarter [3]. - For the full fiscal year 2025, total sales fell 10% to $46.3 billion, and EPS dropped 45% to $2.16 from $3.95 in FY24 [4]. Group 2: Strategic Initiatives - Nike's CEO announced a new "sport offense" strategy aimed at revitalizing growth by focusing on core products, product innovation, and a storytelling marketing approach [4]. Group 3: Valuation Metrics - Nike's stock trades at approximately $62 per share with a forward earnings multiple of 32.1X, which is close to its decade-long median of 29.4X and a 37% discount to its decade high of 51.1X [6]. - Despite the decline in earnings, Nike's valuation remains at a premium compared to the benchmark's 23.5X forward earnings multiple and Adidas at 26.8X [6]. Group 4: Market Position and Outlook - Nike's Q4 report did not provide sufficient evidence for a significant stock rebound, as the company is losing market share to Adidas and emerging competitors like Under Armour [9]. - A turnaround strategy is deemed necessary for Nike, which could lead to a sharp rally in the stock in the future, although immediate prospects appear limited [9].