What to Expect From NIKE’s Upcoming Q3 Earnings Release?

Shares of Nike (NYSE:NKE) surged over 18% intra-day today after the athletic giant reported fiscal fourth-quarter results that exceeded expectations and signaled that the worst financial impact from its turnaround plan is likely behind it.

Nike posted Q4 sales of $11.10 billion, down 12% year-over-year but better than analysts anticipated, helped by signs of stabilization in its core running category. North American sales dropped 11% to $4.7 billion, a decline that was milder than feared.

Earnings per share were $0.14, topping the consensus estimate of $0.12. CEO Elliott Hill’s upbeat remarks during the earnings call—highlighting that the business is poised to improve from here—fueled investor optimism. “It’s time to turn the page,” Hill declared.

Executives also outlined plans to shift more production from China to the U.S., aiming to mitigate potential cost increases from broad U.S. tariffs.

Looking ahead, Nike guided for first-quarter revenue to decline by a mid-single-digit percentage, a forecast more positive than analyst expectations for a 7.3% drop. Management noted that Q4 marked the peak of financial drag from its turnaround initiatives, and they anticipate these headwinds to ease going forward.

• Nike (NYSE:NKE) reported an EPS of $0.14, surpassing the estimated $0.12, with revenue reaching $11.1 billion against the expected $10.7 billion.
• Despite a 12% year-over-year revenue decline, the company's performance exceeded analysts' expectations with a net income of $211 million.
• Under CEO Elliott Hill's leadership, Nike focuses on product innovation and marketing, contributing to its smaller-than-expected revenue decline and ability to surpass profit estimates.

Nike (NYSE:NKE) recently reported its earnings for the fiscal fourth quarter, revealing an earnings per share (EPS) of $0.14, which surpassed the estimated EPS of $0.12. The company's revenue for this period was $11.1 billion, exceeding the estimated revenue of approximately $10.7 billion. This performance indicates strong revenue growth and effective cost management.

Despite a 12% year-over-year revenue decline, Nike's results were better than analysts expected, as highlighted by Visible Alpha. The company's net income fell to $211 million, or 14 cents per share. However, these figures still exceeded Wall Street's expectations.

This quarter marks the third under CEO Elliott Hill, who took over last October. Hill had previously warned that the company's turnaround plan might impact sales negatively in the short term. However, he remains optimistic about the future, stating that the business is expected to improve due to ongoing progress.

Nike's shares experienced a slight decline of about 1% in extended trading following the earnings report. Despite this, the company's strategic focus on product innovation and marketing centered around sports appears to be yielding favorable results. This approach has contributed to Nike's smaller-than-expected decline in revenue and its ability to surpass profit estimates.

Nike's financial metrics provide further insight into its performance. The company has a price-to-earnings (P/E) ratio of approximately 20.64 and a price-to-sales ratio of about 1.93. Its enterprise value to sales ratio is around 2.00, and the enterprise value to operating cash flow ratio is approximately 16.33. Additionally, Nike maintains a debt-to-equity ratio of approximately 0.85 and a current ratio of around 2.19, indicating a strong financial position.

Nike Inc. (NYSE:NKE) is a global leader in athletic footwear, apparel, and equipment. As it prepares to release its quarterly earnings on June 26, 2025, analysts are closely watching the company's financial performance. Nike's earnings per share (EPS) is estimated at $0.11, with projected revenue of $10.7 billion. These figures reflect a challenging period for the company, with significant year-over-year declines.

Despite the anticipated drop in earnings, Nike's stock has shown resilience. After reaching a seven-year low of $52.28 in April, the stock has been on an upward trend, finding support at the $60 level. However, it faces resistance at its 80-day moving average. Historically, Nike's stock has struggled post-earnings, closing lower in seven of its last eight reports, including a 5.5% decline in March.

Analysts have revised their EPS estimates downward by 2.3% over the past month, indicating a reassessment of Nike's financial outlook. This revision is crucial as it can influence investor sentiment and impact the stock's short-term performance. Despite these challenges, Raymond James maintains a "market perform" rating for Nike, suggesting that the results may not be as negative as some anticipate.

Nike's financial health remains strong, with a price-to-earnings (P/E) ratio of approximately 20.06 and a price-to-sales ratio of about 1.88. The company's enterprise value to sales ratio is around 1.95, and its enterprise value to operating cash flow ratio is approximately 15.89. Nike's debt-to-equity ratio of 0.85 and current ratio of 2.19 indicate a solid liquidity position, providing a buffer against market volatility.

As Nike prepares to announce its fiscal fourth-quarter earnings, investors will be keenly watching for guidance on Q1 2026 and the outlook for fiscal year 2026. The company's 7% free cash flow yield is a significant factor in its financial health, offering potential for future growth. Despite the challenges, Nike's strong brand and market position continue to support its long-term prospects.

• Telsey Advisory reaffirms "Market Perform" rating for Nike (NYSE:NKE), indicating a hold position despite anticipated declines in revenue and earnings.
• Nike faces a significant 15% drop in revenues and an 89% decline in earnings per share (EPS) for the fourth quarter, largely due to macroeconomic pressures and changing consumer preferences.
• Despite challenges, Nike focuses on long-term strategies such as innovation and digital transformation, with a free cash flow yield of 7% providing some financial stability.

On June 23, 2025, Telsey Advisory reaffirmed its "Market Perform" rating for Nike (NYSE:NKE), suggesting investors hold the stock. At the time, Nike's stock was priced at $60.82. This rating comes as Nike faces a challenging fourth quarter, with anticipated revenue and earnings declines due to macroeconomic pressures and changing consumer preferences.

Nike is bracing for a 15% drop in revenues and an 89% decline in earnings per share (EPS) for the fourth quarter. The Zacks Consensus Estimate projects revenues at $10.7 billion, a 15.4% decrease from the previous year. Analysts expect EPS to fall to 11 cents, marking an 89.1% drop. These figures highlight the significant hurdles Nike faces, including weakness in the Chinese market and digital sales softness.

Despite these challenges, Nike is focusing on long-term strategies like innovation and digital transformation. The company aims to reshape its recovery trajectory, even as it deals with high costs and a shrinking gross margin. Nike's free cash flow yield of 7% is a crucial factor in its financial health, providing some stability amid the current difficulties.

Historically, Nike's stock has struggled post-earnings, closing lower in seven of its last eight sessions. However, since reaching a low of $52.28 in April, the stock has been on an upward trend, recently establishing support at $60. The current stock price is $61.17, reflecting a 2.30% increase, with a trading volume of 9,503,875 shares on the NYSE.

As Nike prepares to release its fiscal Q4 2025 earnings on June 26, analysts are closely watching for guidance on Q1 2026 and the fiscal year 2026 outlook. The company's inventory liquidation by May 2025 may lead to minor financial improvements. Investors are keen to see how Nike navigates these challenges and leverages its strategies for future growth.

Morgan Stanley lowered its price target on Nike (NYSE:NKE) to $61 from $70 while maintaining an Equal Weight rating, citing a lengthening path to recovery amid macroeconomic pressures and underwhelming brand momentum.

The firm noted that recent tariff developments and broader economic conditions are likely to delay Nike’s turnaround efforts. Adding to the cautious outlook, Morgan Stanley reported limited positive feedback from wholesale partners regarding consumer demand or upcoming product innovations. Additionally, the brand’s visibility and momentum—often referred to as "brand heat"—showed no meaningful improvement over the past three months.

Analysts now believe consensus estimates for fiscal 2026 earnings may be too optimistic, and management could be forced to temper expectations of a post–fourth quarter rebound. While Nike’s strategic execution appears to be gaining some initial traction based on wholesale and specialty retail checks, the broader recovery remains both slow and unpredictable.

Complicating the narrative is Nike’s elevated valuation—trading at 32 times earnings versus its pre-COVID average of 24—making it harder for investors to justify a near-term bet on a turnaround. Still, Morgan Stanley acknowledges that expectations are currently low heading into the next earnings report, leaving room for any positive surprises to act as short-term catalysts.

Nike (NYSE:NKE) shares dropped more than 6% in pre-market today, as a disappointing revenue forecast for the fourth quarter erased initial gains sparked by a stronger-than-expected third-quarter report.

The company reported Q3 earnings per share of $0.54 on revenue of $11.27 billion, beating analyst estimates of $0.29 EPS and $11.02 billion in revenue. The upside was fueled by strong demand for new footwear launches, a bright spot under new CEO Elliott Hill’s early leadership as he works to revitalize the brand.

However, optimism was short-lived after CFO Matthew Friend signaled a mid-teens percentage decline in Q4 sales, steeper than the 12.2% drop expected by analysts. The company also warned that discounting efforts to clear excess inventory could further weigh on fourth-quarter performance.

The update triggered a sharp reversal in sentiment, as investors digested the impact of continued demand softness, especially in key markets. In Q3, overall revenue fell 9%, with North American sales plunging 21% to $1.1 billion, and Greater China revenue dropping a staggering 42% to $421 million.

Despite exceeding profit expectations this quarter, Nike is clearly navigating a challenging retail environment, with regional headwinds and margin pressures clouding its near-term outlook.

Nike (NYSE:NKE) shares dropped more than 6% in pre-market today, as a disappointing revenue forecast for the fourth quarter erased initial gains sparked by a stronger-than-expected third-quarter report.

The company reported Q3 earnings per share of $0.54 on revenue of $11.27 billion, beating analyst estimates of $0.29 EPS and $11.02 billion in revenue. The upside was fueled by strong demand for new footwear launches, a bright spot under new CEO Elliott Hill’s early leadership as he works to revitalize the brand.

However, optimism was short-lived after CFO Matthew Friend signaled a mid-teens percentage decline in Q4 sales, steeper than the 12.2% drop expected by analysts. The company also warned that discounting efforts to clear excess inventory could further weigh on fourth-quarter performance.

The update triggered a sharp reversal in sentiment, as investors digested the impact of continued demand softness, especially in key markets. In Q3, overall revenue fell 9%, with North American sales plunging 21% to $1.1 billion, and Greater China revenue dropping a staggering 42% to $421 million.

Despite exceeding profit expectations this quarter, Nike is clearly navigating a challenging retail environment, with regional headwinds and margin pressures clouding its near-term outlook.