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Yahoo
12 hours ago
- Business
- Yahoo
Should You Buy the 2025 Dip in Nike Stock?
Nike's (NKE) performance over recent years has tested investor faith time and again. But on June 27, the narrative took a turn. After releasing its fiscal fourth-quarter earnings the day prior, NKE stock surged more than 15%, a clear sign that Wall Street heard something it liked. The stock had declined year-to-date (YTD) heading into earnings, but the latest results — backed by newly appointed CEO Elliott Hill's decisive tone — offered a sense of strategic clarity. Though revenue still declined from the previous year, both top- and bottom-line results came in stronger than feared. Microsoft Stock Is Headed for $4 Trillion. Is It Too Late to Buy MSFT Here? Is UnitedHealth Stock a Buy, Sell, or Hold for July 2025? Is Palantir Stock a Buy at New Record Highs? Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! With shares staging one of their best sessions this year, the report has reignited long-term curiosity. For a company that has long represented performance and endurance, Nike now finds itself at the starting blocks of what many hope will be the next great turnaround in retail. Nike commands a powerful presence as the world's top player in athletic footwear, apparel, equipment, and sports gear. With a market capitalization of $105 billion, it is built on a rock-solid brand foundation that includes Nike, Air Jordan, Nike Golf, and Nike Pro. Over the past 52 weeks, NKE stock has dropped 4.5%, a correction reflecting operational challenges and market headwinds. But in just five trading days, the stock has surged 20%, driven by the momentum sparked by the company's latest earnings results. NKE stock is now trading at 41 times forward adjusted earnings and 2.3 times sales. These valuations sit well above the industry average, reflecting the market's willingness to pay up for a potentially accelerating recovery. Adding to its long-term appeal, Nike pays an annualized forward dividend of $1.57, translating into a 2.21% yield. It has raised the dividend for 23 years in a row. The next payout, a $0.40 quarterly dividend, is scheduled for July 1 for shareholders who were on record as of June 2. Nike released its fiscal 2025 fourth-quarter results on June 26, offering numbers that, while far from flattering, managed to land ahead of Wall Street's expectations. Revenue for the quarter came in at $11.1 billion, a 12% decline from the same period last year yet still ahead of analyst forecasts calling for $10.7 billion. Within the results, the company's Nike Direct segment — its direct-to-consumer channel — posted a 14% drop in revenue, largely due to a sharp 26% fall in digital sales. Wholesale revenue declined 9%, and Converse took a 26% hit as well. Margins also faced pressure, with gross margin slipping to 40.3%, weighed down by heavier discounting and reduced full-price volume. Net income came in at $211 million, marking an 86% decline from the prior-year quarter. EPS also fell 86%, landing at $0.14. Despite the sharp contraction, the figure managed to top Wall Street expectations of $0.12. Nike closed the quarter with $7.5 billion in cash and equivalents, giving the company financial breathing room as it pivots its operating model. The brand is now focused on exiting deep discounting, cleaning out excess inventory, and revamping its product mix to restore pricing power and reassert premium status. Geographic diversification is another priority, with tariffs on Chinese imports threatening to drive $1 billion in added costs. Nike is moving its manufacturing footprint away from China to lower exposure and sharpen cost visibility. Looking ahead, analysts project Q1 2026 EPS to fall 61% year-over-year (YOY) to $0.27. For fiscal 2026, EPS is expected to decline 22% to $1.69. However, fiscal 2027 is projected to see a strong rebound, with EPS jumping 55% to $2.62. Wall Street's outlook on NKE stock is beginning to tilt in a positive direction, spurred by signs of a more disciplined turnaround. HSBC called out 'tangible evidence' of a rebound, upgrading its rating from 'Hold' to 'Buy' and raising the price target to $80 from $60. Truist shared a similar stance, maintaining a 'Buy' rating while lifting its price target from $73 to $85, suggesting that Nike's recent restructuring efforts are working faster than expected. NKE stock currently holds a 'Moderate Buy' consensus rating. Out of the 35 analysts covering the stock, 14 recommend a 'Strong Buy' rating, three rate it as a 'Moderate Buy," 16 suggest a 'Hold' rating, and two advise a 'Strong Sell.' The average price target of $75.99 represents potential upside of 3.5%. Meanwhile, the Street-High target of $120 suggests a potential climb of 63% from current levels. On the date of publication, Aanchal Sugandh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Yahoo
15 hours ago
- Business
- Yahoo
Why Nike Stock Jumped 17% in June
Nike is still reporting declines, but sales and EPS were better than expected in the fourth quarter. The company is making progress on its goals, and that should lead to better performance. 10 stocks we like better than Nike › Nike (NYSE: NKE) stock jumped 17% in June, according to data from S&P Global Market Intelligence. The market was happy with its latest quarterly update, and investors see a path toward a rebound. Nike has had an awful few years, as its problems have evolved from supply chain issues to inflation to losing an edge in sports. It's cycled through several CEOs as it tries to work itself back up, and it's landed on veteran Elliott Hill, who may finally be making the decisions the company needs to turn around. Last month, the company reported earnings for the fiscal 2025 fourth quarter, which ended May 31, and although they weren't great, they were better than expected, which usually is enough to generate a thumbs-up from the market. They also demonstrated the kind of progress investors want to see to boost confidence that it can achieve the rebound. Sales declined 10% year over year in the quarter to $11.1 billion, and earnings per share (EPS) fell from $0.99 last year to $0.14 this year. However, the market was looking for $10.7 billion in revenue and $0.13 in EPS. For a frame of reference, competitor Lululemon Athletica's sales increased 7% year over year in a similar time frame to $2.4 billion and produced $2.60 in EPS. Hill gave updates about how the company is meeting its previously stated goals of putting the athlete back into the center of its focus in five distinct areas: culture, product, marketing, marketplace, and ground game. The company had lazily relied on its name and franchises to drive sales, as it lost ground to smaller competitors who were out to get the the athlete by innovating and offering excellent products that helped players play better. Management is diving into sport by creating improved product lines and faster innovation, with a bigger lineup of new launches, and playing into moments through its stellar storytelling capabilities. There were many key wins throughout another largely dismal quarter. For example, Nike's running sales increased by the mid-single digits in the quarter, and the Vomero 18 has already become a $100 million business in only 90 days on the market. The market is excited about Nike because it's already the largest activewear and athletic shoe company in the world by far, with $47 billion in trailing-12-month sales. Investors expect it to bounce back and offer years of growth. It also pays a growing dividend, making it attractive for long-term passive investors. It may take some time, but Nike could be a real turnaround story. Before you buy stock in Nike, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nike wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $722,181!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $968,402!* Now, it's worth noting Stock Advisor's total average return is 1,069% — a market-crushing outperformance compared to 177% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lululemon Athletica Inc. and Nike. The Motley Fool has a disclosure policy. Why Nike Stock Jumped 17% in June was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16 hours ago
- Business
- Yahoo
Is Nike a Buy After Its Q4 Earnings Beat?
Nike's fourth-quarter numbers came in better than expected on both the top and bottom lines. Sales, however, were still down by double digits, and its bottom line was down a whopping 86%. The company faces a tariff hit of $1 billion for the new fiscal year based on current tariff rates, which it plans to "fully mitigate." 10 stocks we like better than Nike › Nike (NYSE: NKE) recently released its latest earnings numbers, which beat expectations and left analysts and investors thrilled. The stock popped on the news, as many investors may see the better-than-expected results as an early indication that the business in going in the right direction under its new CEO, Elliott Hill. The stock has hit levels it hasn't been at in months. Could now be a good time to buy the stock as it starts to rally, or is Nike still too risky of an investment to be hanging on to? On June 26, Nike posted its fourth-quarter and year-end results for fiscal 2025, which ended May 31. For the most recent quarter, the company's sales totaled $11.1 billion and beat analyst expectations of $10.7 billion. And its per-share profit of $0.14 also came in slightly ahead of Wall Street projections of $0.13. The top- and bottom-line beat gave investors reason to be optimistic that perhaps things are going better than expected. Hill says that "from here, we expect our business results to improve." He took over in October of last year, following the retirement of John Donahoe. Hill hopes to turn around the struggling footwear and apparel company by reconnecting with its key retail partners. But while the recent earnings beat may be encouraging to hear, investors shouldn't overlook the fact that sales were still down 12% year over year. And across every major market, its sales were down for the quarter. The company's net income also cratered by a whopping 86%, as sales were down, margins were compressed, and the business spent more on marketing. While the earnings beat may sound good, there are still plenty of issues here that should give investors pause about the business. Management also has to worry about another headwind: tariffs. The company expects that tariffs will cost the business approximately $1 billion during the current fiscal year. And while the company is looking to make adjustments to its supply chain and increase prices to "fully mitigate" the effects of tariffs, it underscores just how vulnerable the business is to global trade policies. Raising prices may work to strengthen its margins, but it may end up hurting demand in the process. And there's also the risk that tariff rates may change. Economic conditions may also worsen across the globe due to trade wars, further impacting the sale of discretionary items, such as Nike's high-end footwear. Investors should be careful not to celebrate too early, because there are still plenty of question marks around the business and how strong its financials may look in the year ahead. Beating quarterly analyst expectations is a short-term metric for a stock. How the business performs over a longer stretch and how sound its fundamentals look will ultimately dictate where the stock will go in the long run. Unfortunately, it's simply far too early, with too little progress made in Nike's turnaround efforts thus far, to suggest it's definitively on the right track and is a safe stock to buy. There's still ample risk here, and paying more than 30 times earnings for a stock that's seeing its revenue plummet doesn't make for a compelling investment opportunity. Investors may be better off taking a wait-and-see approach with Nike's stock, as there could still be tougher times ahead for the business in the months ahead. Before you buy stock in Nike, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nike wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $722,181!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $968,402!* Now, it's worth noting Stock Advisor's total average return is 1,069% — a market-crushing outperformance compared to 177% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy. Is Nike a Buy After Its Q4 Earnings Beat? was originally published by The Motley Fool
Yahoo
2 days ago
- Business
- Yahoo
Is Nike Stock Finally Out of the Woods?
Nike stock (NKE) rallied over 15% on Friday, June 27, after the company's fiscal Q4 2025 earnings came in much better than feared. Management also sounded optimistic on the outlook as the turnaround under CEO Elliott Hill takes shape. In this article, we'll discuss whether Nike, which is still in the red for the year despite last week's rally, is out of the woods. To begin with, let's dive into Nike's Q4 earnings. The company's revenues fell 12% year-over-year to $11.1 billion, but the results were better than the company's guidance, which called for a sales decline in the 'mid-teens range, albeit at the low end.' The number also came in ahead of $10.72 billion that analysts were expecting. Holiday Trading, Trade Negotiations and Other Key Things to Watch this Week Options Flow Alert: Bulls Making Their Move in GOOGL Stock Jeff Bezos Unloads $5.4B in Amazon Shares: Should You Buy or Sell AMZN Stock Now? Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. The company's earnings per share (EPS) fell 86% year-over-year to $0.14 but came in $0.01 higher than Street estimates. Hill admitted that while the Q4 results were in line with the company's expectations, they 'are not up to the Nike standards.' The company expects sales in the current quarter to fall 'mid-single digits' and gross margins to contract between 350-425 basis points. Nike did not provide guidance for the current fiscal year due to the tariff uncertainty. However, pointing to its pipeline of products, Hill said, 'I see a clear path to recovery ahead.' He added, 'From here, we expect our business results to improve. It's time to turn the page.' Here are some of the other key takeaways from Nike's Q4 report Recovery in China Will Take Longer: During the earnings call, Hill admitted that compared to other regions in the Asia Pacific and Latin America (APLA) region, recovery in China will 'take longer due to the unique characteristics of the marketplace.' China has been a difficult market for U.S. companies, whether they focus on cars, fast food, or smartphones. Tariff Impact: Nike said that the current tariff regime would add an incremental $1 billion to its gross costs in the current fiscal year. That number, however, does not account for the price hikes that it recently announced. It is also exclusive of the changes in sourcing strategy as the company plans to reduce the share of Chinese imports from 16% to 'high-single digits' by the end of this fiscal year. Turnaround Costs Have Peaked: CFO Matt Friend said that Q4 'reflected the largest financial impact' from its Win Now turnaround plan. The company expects the pressure on the top line and margins to start moderating, but sees another 75-basis point of margin impact this fiscal year. Notably, while the company is cutting costs as part of the turnaround, Friend said that the company's 'priority right now continues to be reigniting brand momentum through sport and stabilizing' the business. Inventory Liquidation: Nike expects to continue liquidating excess deliveries in the first half of the current fiscal year and is targeting a 'healthy and clean market' by the end of the fiscal year. Wholesale Strategy Is Paying Off: Nike's pivot to wholesale sales is paying off, and its holiday order book is higher compared to the previous year in North America, APLA, and Europe, Middle East, and Africa (EMEA). Sell-side analysts were impressed with Nike's earnings, and multiple brokerages, including Goldman Sachs, Piper Sandler, Citigroup, Barclays, and Baird, raised their target price. HSBC upgraded the stock from a 'Hold' to 'Buy' while raising the target price from $60 to $80. In my pre-earnings analysis, I had noted the possibility of a positive surprise in Nike's fiscal Q4 earnings, given the tepid expectations. The management's commentary corroborates my view of the company. Firstly, as Hill said, a 'full recovery will take time.' Secondly, China remains a problem market for Nike, and the move from foreign to domestic brands in the world's second-biggest economy is more of a structural story. However, Nike's valuations are still quite reasonable, and the stock trades at around 2.4x its expected sales in the current fiscal year. As the company makes progress in its turnaround and returns to top-line growth with margins converging (if not reaching) toward what we have seen historically, Nike stock can deliver a decent return over the medium to long term. Overall, I would echo what Bank of America said on Nike while raising its target price from $80 to $84 – 'the worst is behind.' I would, however, add that patience will be the key here, as there is no overnight fix for the sneaker giant. On the date of publication, Mohit Oberoi had a position in: NKE. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
As revenue falls 10%, Nike preps for $1B tariff hit
This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter. As full-year revenues fall 10%, dipping to $46.3 billion, Nike is realigning its teams around key sports, CEO Elliott Hill said on a call with analysts Thursday. Previously, employees were focused on categories like men's, women's and kids. The goal of the change is to focus employees on designing for the specific athletes they are serving with each sport and give Nike a closer eye on competition. 'The truth is we're in a fight in every sport we're in and each sport has different competitors,' Hill said, adding that this change will give the brand 'a closer line of sight' on the competition. Fourth-quarter revenues were likewise down by double digits, falling 12% to $11.1 billion. Nike Direct fell 14% in the quarter, while wholesale was down 9%. Net income declined 86% to $211 million. The company is expecting a $1 billion impact from tariffs. Hill on Thursday suggested Nike has reached the bottom of its turnaround slump, while acknowledging that its most recent results 'are not up to the Nike standard.' The executive noted that he's made changes to 11 of his 15 direct reports, is confident in the brand's product pipeline and is seeing renewed 'fight' in Nike's employee base. 'We know what it will take to set off the next wave of growth for Nike,' Hill said. 'From here, it's on us to get back to executing at the level we expect.' To that end, Nike said it's made 'significant progress' in cutting back on its classic footwear franchises, with those down by more than 20% year over year. CFO Matt Friend said the Air Force 1 is stabilizing, though Dunk will see more reductions ahead. The declines in these products will continue to be a headwind through the first half of its current fiscal year, Friend said, at which point Nike expects to have a 'healthy and clean market.' The activewear giant is also seeing major declines in its digital channels as it cuts back on promotions and sees fewer sales for those core franchises, which is expected to continue this year. At the same time, Nike is adding more distribution channels, including Amazon, and continuing to work with wholesale partners to strengthen those relationships. 'The 4Q25 print wasn't good in absolute terms, but it wasn't as bad as feared, and there's finally hope that the worst is behind them,' Needham analyst Tom Nikic said in emailed comments. But tariffs may throw another wrench in the retailer's turnaround progress: Nike expects a $1 billion hit from tariffs, given current rates. Friend said the retailer intends to mitigate all of that through a variety of actions, which include shifting some manufacturing out of China, optimizing its sourcing mix, negotiating with partners and executing 'surgical' price increases in the U.S. starting this fall. 'We will evaluate corporate cost reduction as appropriate,' Friend said. 'However, our highest priority right now continues to be reigniting brand momentum through sport and stabilizing our business.' That spending is important, even as it erodes Nike's bottom line because the retailer 'continues to fall out of favor' with shoppers, GlobalData Managing Director Neil Saunders said in emailed comments. Saunders, like Nikic, expressed some willingness to believe that the worst is over for Nike, but said there won't be 'immediate relief' from sales declines given the long timelines on new product development. 'A boredom factor has settled over the Nike brand and the spotlight is now firmly on other labels – especially in terms of fashion and design,' Saunders said. 'It has also lost ground in key categories such as running, where others have the lead in terms of technical functions and forms.' Recommended Reading Nike CEO: Wholesale partners 'feel we've turned our back on them'
