NIKE’s Upcoming Q4 Results and Current Market Challenges
Beaverton, Oregon-based NIKE, Inc. (NKE) is well-known for its innovative designs in shoes and sports equipment. The company develops, markets, and sells athletic footwear, apparel, equipment, accessories, and services. With a market capitalization of $85.1 billion, NIKE operates in over 190 countries throughout the Americas, EMEA, and the Indo-Pacific.
Anticipated Q4 Results
NIKE is set to release its Q4 results on Thursday, June 26. Analysts predict the company will report an adjusted EPS of $0.10, representing a stunning 90.1% decrease from $1.01 reported in the same quarter last year. Conversely, NIKE has successfully outperformed the market’s bottom-line estimates for four consecutive quarters.
Annual Earnings Expectations
For the full fiscal year of 2025, analysts estimate an adjusted EPS of $2.15, a decrease of 45.6% from $3.95 reported in fiscal 2024. By fiscal 2026, predictions indicate a further decline, with earnings expected to drop 9.3% year-over-year to $1.95 per share.
Stock Performance Overview
NKE stock has dropped 38.9% over the past 52 weeks, significantly underperforming the S&P 500 Index’s ($SPX) 10.6% gains and the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 12.3% surge during the same period.
Recent Financial Developments
Despite posting better-than-expected earnings, NKE stock fell 5.5% during the trading session following its Q3 results released on March 20. The company experienced a 9.3% year-over-year decline in overall revenue, totaling $11.3 billion, although this figure exceeded consensus estimates by 2.1%. Additionally, NKE saw a significant margin contraction, resulting in a 32.3% year-over-year drop in net income to $794 million. However, its earnings per share of $0.54 surpassed consensus estimates by an impressive 92.9%.
Challenges and Analyst Ratings
In recent years, NIKE has aimed to boost revenue via its direct sales channels. Unfortunately, this strategy has not yielded the desired results. In fact, direct revenues for the quarter fell nearly 12% year-over-year to $4.7 billion, severely impacting investor confidence.
Nonetheless, the overall consensus on NKE stock remains cautiously optimistic, carrying a “Moderate Buy” rating. Out of 36 analysts covering the stock, there are 17 “Strong Buys,” two “Moderate Buys,” 15 “Holds,” and two “Strong Sells.” As of now, the stock trades significantly below its average price target of $75.87.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
