Nike's Upcoming Earnings: A Rocky Road Ahead as Revenue and Profits Expected to Dip

Nike (NYSE: NKE) is gearing up to release its final earnings report for the 2025 fiscal year, but traders might want to brace themselves for some less-than-stellar news. Set to be unveiled after trading hours on Thursday, the retail giant is anticipated to reveal a notable slump in both revenue and earnings as it continues to navigate its ambitious turnaround strategy.

Analysts forecast that Nike's quarterly revenue will drop by 15% compared to the same period last year, falling to approximately $10.73 billion. Additionally, the earnings per share (EPS) are expected to decline sharply from $0.99 a year ago to $0.13. This downturn in financial performance was signaled back in March when the company cautioned that tariffs imposed during the Trump administration and the execution of its turnaround plan would likely impact fourth-quarter sales adversely. New CEO Elliott Hill, who took the reins in October, is underlining the necessity of innovation in product development as the company tries to manage the inventory of its existing, less popular lines of apparel and footwear.

Among the 17 analysts keeping tabs on Nike, the sentiment appears mixed: eight label the stock as a "buy," another eight suggest it's a "hold," and just one analyst gives it a "sell" rating. The consensus price target hovers around $72, suggesting that experts believe there's potential for Nike's stock to recover much of the value it has lost this year. So far in 2025, the stock has plummeted nearly 20% - a trend that has certainly raised eyebrows in market circles.

Investors are particularly tuned into the outlook for Nike rather than simply the fourth-quarter results. Analysts at Morgan Stanley have lowered their price target for Nike from $70 to $61, citing concerns over macroeconomic pressures and the potential for a delayed turnaround. They noted, "While initial checks of management's strategy execution indicate they are on the right track, the path to improved fundamentals is likely to be longer and more volatile than previously anticipated."

On a brighter note, Bank of America's analysts hold a more optimistic view, with a price target set at $80. They stress that their focus will be more on Nike's future prospects rather than its recent performance. Still, they highlight the need for management to offer clearer guidance regarding the timeline for addressing excess inventory and when the revenue and profit growth can realistically be expected to resume.