Key Stats for Nike Stock
- Pre-Market Price change for Nike stock: -9%
- $NKE Stock Price as of Oct. 1: $35
- 52-Week High: $75
- $NKE Stock Price Target: $46
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What Happened?
Nike (NKE) shares fell about 9% in extended trading on Thursday. The company reported a mixed Q1, and investors were worried about the outlook.
- Earnings per share came in at 48 cents, ahead of the 43 cents analysts expected.
- Gross margin was 42.8%, also better than the 42.4% forecast.
- But revenue fell 4% to $11.21 billion, slightly below estimates.
- Net income was $712 million, down 2% from last year.
China was the biggest problem. Revenue there dropped 26%.
Nike Sportswear, which made up just under half of total revenue, fell by a low-double-digit percentage. North America was a bright spot, with revenue of $5.13 billion, just above estimates.
CEO Elliott Hill said the strong performance in the business is “not yet large enough” to offset weakness in Sportswear, Jordan Brand and Greater China.
Nike also expects revenue to fall by a high-single-digit percentage in fiscal 2027. Its adjusted EPS outlook is $1.15 to $1.35.
The company also announced a restructuring plan called Pace. It includes:
- Supply chain changes
- A new campus in India
- Three regional groups: the Americas, Asia Pacific and Greater China, and Europe, the Middle East and Africa
Nike expects about $2.5 billion in savings through fiscal 2031. The plan will also cut fiscal 2027 EPS by 15 cents.
It will lead to layoffs starting in 2027, and Nike did not say how many jobs will go. This is the third round of layoffs the company has announced this year.
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What the Market Is Telling Us About Nike Stock
The earnings beat carried little weight. Investors focused on what comes next, and the message was cautious. A high-single-digit revenue decline means the turnaround is still far from finished.
Hill also pointed to a “lack of energy” in the lifestyle space and a cautious consumer. That is a tough mix for a company with so much of its sales tied to Sportswear.
Pace could help Nike cut costs over time. But the savings are spread out over several years, and the near-term costs and layoffs are hard to ignore.
Nike stock has already fallen more than 40% this year, so an after-hours drop suggests investors were braced for bad news.
For now, the market wants proof that China and Sportswear are stabilizing. Anyone watching Nike stock will likely focus on whether sales trends improve before the savings from Pace show up.
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So what is Nike stock actually worth?
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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!
