Nike Inc. (NYSE: NKE) is set to report its Q4 fiscal 2025 on Thursday, June 26 after the closing bell, as the retail giant faces challenges from declining sales, margin pressures, competition and tariff uncertainties.
While short-term challenges could impact earnings, Nike has been focusing on innovation, digital transformation and strategic price offerings to stage a comeback in the long term.
Earnings Outlook and Estimates
Nike is expected to report earnings per share at $0.12, down from a figure of $0.99 from the previous year. Revenue is expected to come in at $10.71 billion, which indicates a 15% decline YoY.
In the previous earnings call, Nike was cautious about its Q4 outlook, citing the expected impacts of new tariffs on imports from China and Mexico. Management expects Q4 to show the peak effects of its “Win Now” strategy, with revenue and margin pressures beginning to ease. This strategy is Nike’s focus on supporting growth by innovating products, streamlining operations and cutting costs. ⁽¹⁾
The retail giant has been dealing with many challenges, such as changes in tax laws, tariffs, foreign exchange volatility, and geopolitical tensions.
How Could Nike Stock React to Earnings?
If Nike beats earnings estimates with strong guidance, the stock could see some bullish momentum, especially if the company proves its ability to deal with tariffs and inventory issues.
If earnings miss estimates, the stock could be exposed to bearish pressure as tariffs continue to weigh on the company, impacting its future guidance.
Tough Quarter For Nike
Nike’s Q4 earnings are expected to indicate ongoing challenges, including weak lifestyle product sales, slow digital revenues, and issues in China and certain EMEA regions. These factors are expected to have contributed to slower revenue growth and margin pressure. ⁽²⁾
Declining sales and traffic in both physical and digital stores have added pressure. The company’s classic footwear lines, including men’s, women’s, and Jordan lines, are expected to report softer sales. ⁽³⁾
Gross margins are expected to decline by 4-5% due to restructuring changes, increasing discounts, inventory challenges and unfavorable product lines. SG&A expenses are forecast to rise in the low to mid-single digits, including last year’s restructuring charges. ⁽⁴⁾
Strategic Moves For Recovery
Despite ongoing challenges, Nike is trying to take steps to reduce challenges. The company is focusing on strategic pricing and applying changes in the supply chain, including improving logistics, managing inventory and distribution which could bring some relief for the company. Strong inventory management has been an important factor for Nike’s ability to move through these challenges.
Nike’s previous earnings report stated its strategy “Win Now”, aims to address short-term pressures while laying the groundwork for future growth. Management expects Q4 to indicate the peak of these challenges, with revenue and margin pressures beginning to ease in the coming quarters.
Innovation and Hopes of Recovery for Long-Term Growth
Nike is focusing on innovation and performance in order to renovate its product lineup with new designs and materials, where the majority of the focus will be on the sports performance segment. Nike is increasing new products in each seasonal drop while managing its dominant presence of its classic models. ⁽⁵⁾
On the digital front, Nike Digital is being integrated more deeply into its overall marketplace strategy. It’s reducing promotional events and markdowns to protect brand value and shifting clearance inventory to Nike Factory Stores instead of selling it online at steep discounts. ⁽⁶⁾
For its wholesale partners, Nike is reducing forward supply, offering better discounts, and supporting sales with fewer returns to help clear older stock. These efforts are designed to clean up the retail landscape and accelerate growth over time.
Tariff Challenges
Nike’s production is outside the US indicates risks from international trade and tariff risks. Management has considered that the impact of tariffs on imports from China and Mexico, which are expected to impact Q4 earnings. Nike’s supply chain optimization and strategic pricing could reduce risks from these issues. Investors will monitor management’s comments and outlook on fiscal Q1 2026 and how Nike could manage through these pressures. ⁽⁷⁾
Market Sentiment and Outlook
Market sentiment has been cautious as investors wait for the report. Nike has a history of beating analysts’ earnings estimates, having surpassed expectations for four consecutive quarters. Any comments from management regarding future strategy, stabilization in China, improvements in direct-to-consumer trends and insights on Q1 2026 guidance could represent volatile factors for Nike stock.
