TLDR
- Nike reports Q4 FY25 earnings Thursday after market close with analysts expecting $0.12 EPS, down 88% year-over-year
- Stock down 20% year-to-date due to soft sales, excess inventory, and margin pressure from tariffs
- Key product lines like Jordan and Dunk sneakers selling slowly, requiring discounts on resale platforms
- New CEO Elliott Hill viewed as catalyst for turnaround, though recovery timeline extended
- Wall Street maintains Moderate Buy rating with average price target of $73.68, implying 23.8% upside
Nike faces a critical test when it reports fourth quarter results on Thursday after market close. The sportswear giant has struggled through a challenging year with its stock down 20% as investors question whether the company can execute its turnaround strategy.
Wall Street expects earnings of $0.12 per share for the quarter, representing an 88% drop from the same period last year. Revenue projections stand at $10.70 billion, marking a year-over-year decline of over 15%.
The company has been grappling with multiple headwinds that have pressured both sales and margins. Excess inventory has forced Nike to engage in clearance activities throughout the quarter.
Tariffs have added another layer of complexity to Nike’s cost structure. The company faces an additional 10% tariff rate for reciprocal tariffs in countries like Vietnam and Indonesia, while China tariffs remain elevated at 30%.
Brand Heat Concerns Surface
Several analysts point to weakening brand momentum as a core challenge. Needham analyst Tom Nikic noted that many product launches of previously coveted sneaker models are selling slowly.
Jordan and Dunk retro releases that typically command premium prices on resale platforms like StockX and GOAT are now trading at discounts. This marks a shift from Nike’s typical performance when brand heat runs high.
Online search trends for Nike have shown consistent year-over-year declines. Credit card transaction data reveals persistent double-digit drops in the company’s direct-to-consumer channel in the United States.
The brand’s classic footwear franchises have seen order book declines for Fall 2025. However, wholesale partners have expressed excitement about Spring 2026 innovation following meetings with new CEO Elliott Hill.
Leadership Change Brings Hope
The appointment of Nike veteran Elliott Hill as CEO represents the biggest catalyst for change according to multiple analysts. His deep understanding of the company’s operations and wholesale relationships provides confidence in the turnaround strategy.
Management has acknowledged past mistakes and is working to correct them through inventory cleanup and product portfolio rebalancing. The focus has shifted toward increasing newness while reducing emphasis on classic franchises.
Nike has expanded partnerships with retailers like Academy Sports + Outdoors, rolling out Jordan brand to 145 stores in April. The retailer reports strong initial customer reaction with sales tracking ahead of plans.
The company has implemented selective price increases of $5 to $10 on average across certain products. However, Jordan brand and Nike kids items under $100 remain unchanged to protect price-sensitive segments.
New product launches include the Astra Ultra lifestyle sneaker exclusively for women this fall. Nike is also bringing back the Air Flightposite in a “Sail” colorway later this month.
OFFICIAL LOOK: Nike introduces new Astra Ultra silhouette 🖤
🗓️ Fall 2025 pic.twitter.com/wvEf3MN864
— JustFreshKicks (@JustFreshKicks) June 15, 2025
Telsey Advisory Group analyst Cristina Fernández believes Nike is several quarters away from business stabilization. She credits the company for making necessary moves but notes the timeline for recovery remains extended.
The NikeSKIMS collaboration originally scheduled for Spring 2025 remains a key growth driver that investors will monitor for timing updates. Inventory reduction efforts continue as the company works to rightsize key lifestyle franchises.
Needham’s Nikic lowered his price target to $66 from $75 while maintaining a Buy rating, citing confidence in long-term prospects despite near-term challenges.
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