NIKE(US:NKE) Benzinga·2025-12-19 05:58Core Viewpoint - Nike Inc. shares fell nearly 11% in after-hours trading due to a cautious outlook characterized by shrinking margins and challenges in China during the second-quarter earnings call [1] Financial Performance - Nike reported revenue of $12.43 billion, exceeding analyst estimates, but warned of a fragile recovery with a disappointing forecast for the third quarter [2] - The CFO guided for third-quarter revenue to decline in the low single digits and for gross margins to contract by approximately 175 to 225 basis points [2] Cost Pressures - A significant rise in product costs due to reciprocal tariffs is expected to create a $1.5 billion annualized headwind [3] - Without the projected 315-basis-point impact from tariffs, gross margins would likely be positive in the third quarter, highlighting severe macroeconomic pressures [3] Regional Challenges - Revenue in Greater China fell 16% in the second quarter, with digital sales down 36% due to declining store traffic and a promotional marketplace [4] - The CEO indicated that the region faces a "longer road to a healthier business," and the turnaround is not occurring at the necessary pace [5] Domestic Performance - North America revenue increased by 9%, driven by a 24% surge in wholesale, indicating that Nike's "Win Now" strategy is gaining traction domestically [5] Future Outlook - The CEO described the company as being in the "middle innings" of its recovery, emphasizing that success must be earned [6] - Shares of NKE ended lower at $65.63, down 13.27% year-to-date and 14.66% over the year, but up 10.28% over the last six months [6]