Key Stats for Nike Stock
- Price Change for $NKE stock: 3.7%
- Current Share Price: $72.30
- 52-Week High: $85
- $NKE Stock Price Target: $81
What Happened?
Nike (NKE) stock jumped almost 4% after the company reported surprise sales growth in its fiscal first quarter, significantly beating Wall Street expectations.
Revenue came in at $11.72 billion versus the $11 billion analysts expected, while earnings per share stood at $0.49, above estimates of $0.27.
The results marked a rare bright spot for Nike after months of declining sales and mounting concerns about the turnaround strategy.
Revenue grew 1% year over year, a major improvement from the 8% drop in the year-ago quarter. CEO Elliott Hill said the company is making “tangible progress” in three key areas: wholesale partnerships, product development, and the North American market.
The wholesale business drove much of the strength, growing 7% to $6.8 billion. North America sales climbed 4% to $5.02 billion, well ahead of the $4.55 billion analysts projected.
The running category experienced significant growth, with an increase of over 20%, as new products, such as the redesigned Vomero, Structure, and Pegasus, gained traction among consumers.
Nike warned that sales during the current quarter, which covers most of the holiday shopping season, will fall by a low single-digit percentage.
Nike also expects tariff costs to hit $1.5 billion this fiscal year, up from the $1 billion estimate given just three months ago. That will slice 1.2 percentage points off the gross margin, up from the previously projected 0.75 percentage point impact.
CFO Matt Friend warned that “progress will not be linear” as different parts of the business recover on different timelines.
Gross margin declined 3.2 percentage points to 42.2% in the quarter, primarily due to wholesale discounts, factory store markdowns, higher product costs, including tariffs, and an unfavorable channel mix. Net income dropped 31% to $727 million. For the current quarter, Nike expects its gross margin to decline by another 3 to 3.75 percentage points.
Hill has been pushing hard on his turnaround plan since taking over nearly a year ago. The strategy centers on reigniting Nike’s innovation engine, clearing out old inventory, and reorganizing the company by sport rather than by demographic categories, such as men’s, women’s, and kids.
See analysts’ growth forecasts and price targets for Nike stock (It’s free!) >>>
What the Market Is Telling Us About Nike Stock
Nike’s stock is rallying on these results, which indicates that investors are willing to give the turnaround credit for small wins, even if the path forward remains bumpy.
The wholesale growth is crucial because it signals that Nike is rebuilding relationships with retail partners after years of prioritizing direct-to-consumer sales under its previous CEO, John Donahoe.
However, China sales fell 9%, with Hill calling out “structural challenges in the marketplace” and noting that seasonal sell-through continues to underperform. The company expects revenue and gross margin headwinds from China to persist throughout fiscal 2026.
For investors, the question is whether Nike can execute the turnaround fast enough before tariffs and competition do more damage.
The company has ample cash to invest in the strategy, but clearing old inventory through discounting is expensive and time-consuming. The fact that inventories decreased by only 2% year over year, with the decline stemming from lower units offset by higher costs from tariffs, indicates that this work is not yet complete.
If Hill can deliver on the Sport Offense vision and the product pipeline continues improving, Nike stock could have substantial upside from current levels.
The brand still resonates globally, the athlete partnerships remain best-in-class, and the innovation capabilities are intact.
However, with tariff headwinds intensifying, slowing sales in China, and declining online revenue, the turnaround timeline continues to extend.
Wall Street Analysts Are Bullish on These 5 Undervalued Compounders With Market-Beating Potential
TIKR just released a new free report on 5 compounders that appear undervalued, have beaten the market in the past, and could continue to outperform on a 1-5 year timeline based on analysts’ estimates.
Inside, you’ll get a breakdown of 5 high-quality businesses with:
- Strong revenue growth and durable competitive advantages
- Attractive valuations based on forward earnings and expected earnings growth
- Long-term upside potential backed by analyst forecasts and TIKR’s valuation models
These are the kinds of stocks that can deliver massive long-term returns, especially if you catch them while they’re still trading at a discount.
Whether you’re a long-term investor or just looking for great businesses trading below fair value, this report will help you zero in on high-upside opportunities.
Click here to sign up for TIKR and get our full report on 5 undervalued compounders completely free.
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
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!
