Nike shares rise as the struggling sneaker icon sidesteps an expected pandemic-era sales dip
To be fair... the bar was low.
Nike shares jumped 2% in after-hours trading Thursday after the sneaker giant’s quarterly results weren’t as bad as Wall Street had feared. While revenue fell 9% to $11.3 billion, it still topped analysts’ forecasts, which had called for the steepest drop since 2020. Earnings per share came in at $0.54, far surpassing the $0.30 forecast by analysts, according to FactSet.
“I don’t think these results are a sign of strength in the Nike business — they are simply better than many of us feared,” said Sheraz Mian, director of research at Zacks Investment Research. “They did better in North America and were able to sustain their margins, but we will have to see if the North America gains can be sustained given renewed worries about the health of consumer spending. All in all, Nike remains a work in progress. The market’s favorable reaction to the results reflects a sigh of relief that things aren’t getting worse.”
Nike’s sales have been challenged in the postpandemic era, including missteps like severing ties with wholesale partners and leaning too heavily on popular styles. Nike shares have fallen 28% over the past year. To get the ball back in its court, Nike has rolled out splashy new collaborations (like the latest one with Kim Kardashian’s Skims) and implemented a “Win Now” strategy that focuses on driving innovation, strengthening direct-to-consumer sales, and heavily discounting extra inventory.
Nike’s newest CEO, Elliott Hill, is confident the strategy will pay off. “The progress we made against the ‘Win Now’ strategic priorities we committed to 90 days ago reinforces my confidence that we are on the right path,” Hill said in the earnings release. “Our outlook for the second half of fiscal 2025 driven by our ‘Win Now’ actions remains consistent with what we communicated last quarter.”
