Nike Stocks soared 17% on Friday, the company said Better than fear Fourth quarter earnings report.
Nike reiterated on Thursday that this will take the biggest financial hit in the turnaround plan for the quarter, soothing investors worried about the president Donald TrumpTariff hikes Key Nike Manufacturing Hubs like China and Vietnam will bring the company back.
Nike’s fourth quarter difference, sales fell 12%, net revenue fell 86%, and profit margins fell. But CEO Elliott Hill stressed that the company has emerged from its worst downturn, with a slideshow of sales and profits going to start moderate in the coming quarters.
“The results we report today in the fourth quarter and fiscal 25th are not meeting Nike standards, but as we said 90 days ago, our efforts to reposition the business through the ‘Win Now Now’ action are having an impact,” Hill said on the revenue call. “From here, we hope our business results will improve. It’s time to turn the page.”
There were few details on the progress of Nike’s turnover strategy in the company’s earnings release, so the company’s stock initially declined when it posted results after Thursday’s end. By the end of an hour-long call with Nike executives and Wall Street analysts, the stock soared more than 10% in expansion trading.
In addition to ensuring investors’ turnaround plans are running, Hill has also shared promising updates about new product launches and Nike’s efforts to win a wholesale partner, a key area since he took over in October.
Hill shares details about Nike’s decision to start selling Amazon for For the first time since 2019 And working to win over female shoppers, this is another priority for the company.
During the quarter, the company launched its products in more than 200 women’s LED stores, including Aritzia, and released a collection with WNBA star A’ja Wilson, which Hill said sold out in three minutes.
By Friday morning, the stock was even higher after many banks made bullish comments on the company. HSBC Bank Upgrade Nike Buy from Holdit rated the stock as the first buy in 3½ years.
HSBC also raised its target share price to $80, meaning it rose from 28% from Thursday’s closing price.
“The production is long, but we think the inflection point is finally here,” analyst Erwan Rambourg wrote in a research note. “We think that besides the obvious evidence, Nike has a way to see its sales rebound in the near future and profit margins that will be fixed, and despite adverse effects on tariffs, this is in the near future.”
Nike’s results show that the company is rebounding with a timeline that Wall Street likes. But don’t call it a comeback.
The sneaker giant is trying to develop again during a period of shaky economy as weak consumer sentiment, rising debt, tariffs and mass deportations raise questions about spending and GDP.
Nike still expects a percentage drop in sales for the current quarter, according to LSEG data.
There is also more work to do to clean up the stale lifestyle list from classic dunks and Jordan lines. These efforts to clear old stocks have achieved profit margins and sales, as Nike has had to rely on deep discounts, liquidation channels and downprice industries to clear this outlier.
In fiscal 2025, ended last month, classic sales such as Air Force 1, Air Jordan 1 and Dunks fell by more than 20% compared to the same period last year. In the fourth quarter, this accelerated to 30%, which affected nearly $1 billion in sales, said Matt Friend, head of finance.
Friend said Air Force 1 inventory levels have begun to stabilize, but Nike is still working to clear out the supply of its dunk franchise, which will impact the company’s profits in the first half of the current fiscal year.
Hill and friends both said Nike’s profits would be under pressure in the first half of fiscal 2026 as it operates through inventory and argues from tariffs at higher fees. They said they expect profits to increase in the second half of the year.
However, in terms of actual sales growth, it is too early to say when the company will stop shrinking.
Hill refused to share the timeline when asked whether the company could resume revenue growth this year.
“We will take 90 days each time just because of everything that is happening,” Hill said. “We think it will take time for a full recovery.”
Correction: This article has been updated to correct Aritzia’s spelling.
