Nike Stocks rose 17% on Friday. It comes after the company said it is behind a better struggle than its feared fourth-quarter revenue report.
Nike reiterated on Thursday that it will take the biggest financial hit from its turnaround plan during the quarter. Investors worried about President Donald Trump’s tariff hikes on major Nike manufacturing hubs like China and Vietnam were worried that he would derail the company’s comeback.
Nike recorded a fourth quarter decline as sales fell 12%, net profit fell 86%, and profit margins fell. However, CEO Elliott Hill highlights the company is emerging from its worst recession, and sales and profit slides will begin to slow down in the coming quarters.
“The results we report today in Q4 and FY25 are not up to Nike’s standards, but as I said 90 days ago, the work we do to reposition our business through “Win Now” actions is having an impact.” “From here, we hope that business outcomes will improve. Now it’s time to turn the page.”
With little detail on Nike’s turnaround strategy progress in the company’s revenue release, the stock initially fell when it posted the results after Thursday’s closing bell. By the end of an hour’s call between Nike executives and Wall Street analysts, the stock had skyrocketed over 10% in extended trading.
Not only did investors ensure that the turnaround plan is working, Hill shared a promising update on Nike’s efforts to bring back the wholesale partners, which have been a key area since it took over in October.
Hill shared details behind Nike’s decision to start selling Amazon For the first time since 2019, and the push to win over female shoppers, is another company’s priority.
During the quarter, the company launched products in over 200 women’s LED shops, including Artizia, and released a collection with WNBA star A’ja Wilson.
By Friday morning, shares had risen even further after many banks issued bullish commentary to the company. HSBC I upgraded my Nike and bought it from Hold, the first buy rating of stocks in three and a half years.
HSBC also raised its price target to $80, meaning 28% upside since the end of Thursday.
“For a long time, but we think the inflection is finally here,” analyst Arwan Rambourg wrote in his research notes. “We think there is concrete evidence that Nike has a path to see sales rebounds in the not too distant future and a path to see margins being repaired.
Nike’s results show that the company likes Wall Street! But don’t call it a comeback yet.
The sneaker giant is about to grow again during a period of unstable economic trembling as weak consumer sentiment, rising debt, tariffs and massive deportation raise questions about spending and GDP.
Nike expects current quarter sales to decline by half-digit percentage of the quarter, in line with Wall Street’s forecast of 7%, according to LSEG.
There are also things you need to do to clear out old lifestyle stocks from classic dunks and Jordanian lines. These efforts to clear old inventory reached profit margins and sales as Nike had to rely on deep discounts, clearance channels and off-price sectors to clear its GLUT.
In 2025, which ended last month, sales of classics such as the Air Force 1, Air Jordan 1 and Dunk fell by more than 20% compared to the same period last year. It accelerated to 30% in the fourth quarter, affecting sales by nearly $1 billion, said Matt Friend, the head of finance.
Air Force 1 stock levels are beginning to stabilize, but Nike is still working to clear the supply of the Dunk franchise.
Both Hill and his friends said Nike’s profits will be under pressure as they function through its inventory throughout the first half of fiscal year 2026, fighting for higher costs from tariffs. They said they hope that profits will improve later in the year.
However, when it comes to actual sales growth, it is still too early to know when the company will stop shrinking.
When asked if there is a scenario that could allow the company to return to revenue growth this year, Hill refused to share the timeline.
“We’re going to take it for 90 days at a time for everything that’s ongoing,” Hill said. “I believe that a full recovery will take time.”
