Shoppers pass Nike stores on April 3, 2025 at the King of Prussian Mall in Prussia, Pennsylvania, as the Global Market will take charge of trade and growth as President Donald Trump’s decision to impose import duties on dozens of countries.
Rachel Wysnievsky | Reuters
Nike It is expected to report post-quarter results on Thursday after warning investors that their low turnaround point could come in the fourth quarter.
However, since Nike issued the warning in March, conditions for the sneaker giant have deteriorated, causing some investors to question whether the worst still should come for sales and profits.
Nike was at the time fighting a 20% tariff on goods imported from China, but President Donald Trump raised the obligation to 30%. The first product in Kim Kardashian’s highly anticipated partnership with Trimates Line Skims was scheduled to be released in the quarter, but is now behind in the second half of the year, CNBC previously reported.
As part of the turnaround, Nike uses discounts and clearance channels to offload old stock from the retro line. However, these efforts are “clearly tougher than expected.” That means that the benefits could still be more room before they get better, Evercore said in a research note on Monday.
Conditions for the major Chinese market have also deteriorated since March, which has become even more emotional, Evercore said.
Although several factors have deteriorated since Nike last reported revenue, there are indications that efforts to release more innovative styles are resonating with consumers, the bank said. Recent price increases across Nike’s business could offset higher costs from tariffs unless those hikes turn off consumers.
Consumer sentiment rebounded from the last quarter, and Nike’s sales may have benefited from April when many customers bought to boost prices from tariffs as they increased their shopping. Still, the rise was short-lived as US retail sales fell more than expected in May.
According to LSEG’s consensus estimates, analysts expect the world’s largest sneaker company to report in the fourth quarter:
Earnings per share: 13 cents per Sharerevenue: $10.72 billion
Since Elliot Hill took over as CEO of Nike in October, he has focused on retrieving wholesale partners after former CEO John Donahoe pursued a direct sales strategy that helped reduce sales and profits.
The company says its direct channels, meaning its website and stores, hopefully bringing inventory back to wholesalers will reduce sales. Nike Stores stairs have been declining since Hill took over, but conditions began to improve in May. According to Placer.ai, it is an analytics company that estimates overall visits to locations using anonymized data from mobile devices.
According to Placer.ai, monthly visits to Nike Stores fell 10.2% in April compared to the previous year, but fell to 3.2% in May.
Investors are most interested in Nike’s guidance when the company holds revenue calls at 5pm ET. But Wall Street is looking for details on changes to its turnaround timeline, insight into the product launch pipeline, and whether to cut more costs.
Planning a partnership with Nike and Skims is also a key point. Besides clearing old stocks and releasing more innovative styles, Nike is working to attract more female shoppers, estimated to represent around 40% of its business.
This gender gap is not ideal for discretionary retailers as women tend to spend more on clothing than men. Nike has lost market share of athletic apparel competitors such as Lululemon and Alo Yoga.
Sneakers remain the most important part of Nike’s business, but apparel is the company’s growth area, accounting for around 28% of the Nike brand’s revenue in 2024.
