Key Stats for Nike Stock
- Pre-market Price Change for Nike stock: -10%
- $NKE Share Price as of Dec. 18: 65.63
- 52-Week High: $82.44
- $NKE Stock Price Target: $83
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What Happened?
Nike (NKE) stock is down over 10% in pre-market despite beating Wall Street estimates for earnings and revenue in its second fiscal quarter.
The company earned $0.53 per share on revenue of $12.43 billion, both ahead of analyst expectations.
So why the selloff? Investors are worried about China.
Nike’s Greater China revenue plummeted 17% to $1.42 billion, continuing a troubling trend in one of the company’s most important markets. CEO Elliott Hill acknowledged the struggle, saying improvements in China are “not happening at the level or the pace we need to drive wider change.”
The weakness in Nike stock also dragged down European competitors Adidas and Puma, as investors across the industry reassessed the health of the critical Chinese consumer market.
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What the Market Is Telling Us About Nike Stock
The market’s harsh reaction shows that investors aren’t willing to give Nike credit for its strength in North America (up 9% in the quarter) when China remains such a significant problem.
Hill described the company as being in the “middle innings” of its turnaround, but the timeline for recovery in China remains uncertain.
Nike stock faces additional pressure from tariffs, which hit gross margins by 3.15 percentage points this quarter. The company expects third-quarter revenues to decline slightly, with gross margins dropping another 1.75 to 2.25 percentage points.
There are some bright spots, given that Nike.com posted its best Black Friday ever, driven by the Air Jordan “Black Cat” launch.
The company’s wholesale business grew 8%, showing renewed strength in partner relationships. And Nike is launching new products, such as Nike Mind, a footwear platform designed to help athletes prepare for competition.
But these positives aren’t enough to offset investor concerns about the lengthy road ahead in China and continued margin pressure from tariffs. Citi analysts noted the weakness in China “keeps us cautious on the recovery and highlights the complicated turnaround underway.”
For now, Nike stock reflects a company that’s making progress in some areas but still has significant work to do before investors feel confident in a sustained recovery.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
