Nike (NKE) has reported a mixed quarter, with revenue declines continuing due to its ongoing turnaround efforts, yet it managed to beat expectations and regain investor confidence. Under CEO Elliott Hill’s “Win Now” strategy, the company aggressively liquidated excess inventory as part of its supply chain reset and moved to premium pricing to offset challenges like tariffs and weak demand in China. The strategic shifts, such as returning to Amazon and digital-first pricing initiatives, are laying the groundwork for a potentially stable future.
● Revenue: $11.10 billion, down 12% YoY, yet surpassing expectations.
● EPS: $0.14, beating estimates of $0.12.
● Net Income: $211 million, sharply lower from $1.5 billion a year ago.
● Gross Margin: Contracted 0.44%, now at 40.3%.
● Nike Direct Sales: Down 14%; digital down 26%, offset slightly by 2% growth in stores.
● Regional Sales: North America -11% and Greater China -21%
Nike’s Q4 results signal that its turnaround is gaining traction, despite a sales and profit drop, the stock rallied over 14% as investors gained confidence in management’s “Win Now” strategy. The company is rebounding through renewed product launches, like its WNBA collaboration, broader female-focused initiatives, and strategic retail decisions. HSBC’s upgrade to Buy with an $80 price target highlights growing optimism that Nike has turned around, with added tariff-related cost pressures. Still, the path to recovery isn’t linear. Management cautions that inventory clearance and elevated tariffs will compress margins in H1 FY 2026, and single-digit sales declines are expected in the near term.
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** This article was prepared by BROKSTOCK analyst Maboko Seabi
