A shopper walked past Nike stores, and global markets swept the Prussian Kings shopping mall in Prussia, Pennsylvania. U.S. President Donald Trump decided to impose import tariffs on dozens of countries.
Rachel Wisniewski | Reuters
Nike It is expected to be followed by poor quarterly results on Thursday Warn investors Its downward lows may have come in the fourth quarter.
But the conditions for the sneaker giant have deteriorated since Nike’s warning, leading some investors to question whether the worst sales and profits will come.
Nike imposed a 20% tariff on goods imported from China at the time, but the president Donald Trump Since then, the responsibility has been increased to 30%. Its first product A highly anticipated partnership Kim Kardashian’s Intimates Lines Line abbreviation was supposed to be launched this quarter, but now This has been delayed CNBC previously reported that later this year.
As part of its turnaround, Nike has been using discount and gap channels to unload stale stocks from its retro line. But the efforts are “apparently harder than expected”, meaning their profits still have more room for profit until they get better.
Evercore said that since March, conditions in major Chinese markets have also deteriorated, which further puts sentiment seriously.
The bank said that while some factors have intensified since Nike’s last report on earnings, there are signs that its efforts to unleash more innovative styles have resonated with consumers. Recent Prices rise Throughout Nike’s business, the higher costs of tariffs can be offset as long as these hikes do not shut down consumers.
Consumer sentiment Rebounded Nike’s sales could have benefited from April starting last quarter, when many customers Improve purchaseit is possible to avoid higher tariffs. Nevertheless, this growth is short-lived due to U.S. retail sales Decline exceeds expectations in May.
According to LSEG’s consensus estimate, this is what analysts expect the world’s largest sneaker company to report their fiscal fourth quarter:
- Earnings per share: 13 cents per share
- income: $10.72 billion
Since Elliott Hill took over as CEO of Nike in October, he has been working to win wholesale partners after former CEO John Donahoe adopted a direct sales strategy, which is Sales and profits fall.
The company said it expects its direct channels (meaning its website and stores) to see sales drop as it transfers inventory back to wholesalers. Since Hill took over, Nike stores have fallen, but conditions have begun to improve in May. placer.aian analytics company, uses anonymous data from mobile devices to estimate overall access to locations.
According to monthly visits from the previous year, Nike Stores saw a 10.2% drop in monthly visits, but fell to 3.2% in May. placer.ai.
Investors will be most interested in Nike’s guidance when the company hosts its earnings call at 5 p.m. ET. However, Wall Street will also seek any changes to the turnaround schedule, dig deep into its product launch pipeline and detail whether it will cut more fees.
Nike’s plan to cooperate with the heads will also be the key point. In addition to clearing out stale stocks and releasing more innovative styles, Nike is also working to win more female shoppers, who are estimated to make up about 40% of their business.
This gender gap is not ideal for discretionary retailers, as women tend to spend more money on clothes than men. Nike lost market share from sportswear rivals Lululemon and Alo Yoga, which are suitable for similar customers but are more suitable for women.
Sports shoes remain the most important part of Nike’s business, but clothing is the company’s growth area, accounting for 28% of Nike’s brand revenue in fiscal 2024.
