Nike Inc (NYSE:NKE) Earnings Report Overview

Nike Inc is expected to report a slight earnings beat for its fiscal second quarter of 2025, driven by cost controls. However, revenue remains under pressure due to challenges in sales and profit margins.

An analyst commented, "We expect slight 2Q25 EPS outperformance, but on lower-quality drivers & reflective of a very challenged trend – making for a similar outcome to recent quarters."

Morgan Stanley has lowered its price target on Nike shares from $82 to $80, citing ongoing risks to earnings and a slower-than-expected recovery.

Analysts predict earnings per share of $0.67 for the company, slightly above the Street's estimate of $0.65, but anticipate weaker revenue and lower gross margins.

Nike is also expected to provide guidance that falls below Street expectations, enhanced by the current uncertainty under new CEO Elliott Hill's leadership. The company continues to face inventory challenges and has limited visibility into strategic changes.

Sales in North America and global direct-to-consumer credit card transactions are declining. Additionally, demand in China remains weak, exacerbated by excess inventory issues that have led to more aggressive promotions. Morgan Stanley has revised its sales forecast down by 10% year-over-year, compared to the Street’s 9% decline estimate.

Nike’s stock has found a valuation floor, buoyed by investor optimism around Hill's potential strategic shifts. However, management is under pressure to address declining revenue and profit margins, with long-term growth dependent on effective inventory management, revitalizing sales, and controlling promotional activities. While the new CEO brings some hope, analysts maintain a cautious outlook on the company's near-term performance.