Summary
Nike is set to release its latest quarterly earnings on December 18, 2025 (after U.S. market close). Market attention is focused on the profit inflection point brought by inventory clearance and product mix adjustment, as well as marginal improvement in channel relationship recovery.
Market Expectations
The market consensus estimates Nike’s total revenue for this quarter at $12.221 billion, a year-on-year increase of 0.77%. Gross margin forecast is not disclosed, and net profit or net margin estimates are also not provided. Adjusted EPS is expected to be $0.38, representing a year-on-year decline of 40.64%. EBIT is projected to be $696 million, down 37.46% year-on-year. In the previous quarter, Nike's brand revenue was $11.362 billion, Converse revenue was $366 million, and corporate adjustments amounted to -$80 million. The main highlights of the company’s current business are the high proportion of Nike brand, and the ongoing product line restructuring in professional athletic footwear and apparel. Future outlooks show promise in channel recovery and new product driving of Nike brand, with total revenue of $11.362 billion, year-on-year information not disclosed.
Previous Quarter Review
In the previous quarter, Nike reported revenue of $11.72 billion, up 1.13% year-on-year. Gross margin was 42.18%, with year-on-year data not disclosed. Net profit attributable to the parent company was $727 million, with a net margin of 6.20%, representing year-on-year growth of 244.55% on a sequential basis. Adjusted EPS was $0.49, down 30.00% year-on-year. The focus last quarter was on inventory clearance and product mix optimization, with expenses and discount strategies helping to improve channel quality. In terms of business segments, Nike brand revenue was $11.362 billion, Converse revenue was $366 million, and corporate adjustments amounted to -$80 million. Nike brand contributed the most, but year-on-year data was not disclosed.
Outlook for This Quarter
Profit Impact of Product Mix Restructuring and Inventory Clearance
Nike continues to reduce the proportion of classic shoe styles under the "Win Now" plan, pushing new iterations in professional segments such as running and basketball. This strategy was already evident last quarter with revenue structure more focused on high-performance and premium categories. The market forecasts EBIT of $696 million this quarter, a significant year-on-year decrease. The core variable lies in whether the pressure from clearing inventory of classic models like Dunk, Air Jordan 1, and Air Force 1 on discounts and gross margin will continue to ease. Institutional commentary indicates that the first half of this fiscal year experienced the most significant impact of strategic adjustments, with negative effects expected to diminish subsequently. If autumn orders are fulfilled on delivery, there is potential for improvement in the product mix's gross margin structure. For stock prices, if revenue remains flat with slight growth and EBIT decline narrows, the market will focus more on the pace of gross margin and channel discount recovery, which will determine the timing of the profit inflection point.
Channel Relationship Recovery and Brand Power Restoration
The company has resumed partnerships with major retail partners and expanded distribution on e-commerce platforms, coupled with investments in stores and visual marketing to enhance terminal display and consumer reach quality. Market reaction was favorable after the last earnings report, mainly due to a rebound in reseller order data and inventory level improvement expectations. If revenue grows as forecasted by 0.77% this quarter, channel health will be a key focus. The women’s category and cross-brand collaborations received greater attention last quarter, with rapid sell-through cases indicating that brand storytelling and new product pacing are yielding results. For stock prices, channel recovery strengthens revenue certainty. Once inventory and discount pressure marginally eases, the room for profit elasticity and valuation restoration becomes more visible.
Addressing Expense and Tariff Pressure
Industry reports mention potential additional tariffs bringing about $1 billion in cost pressure. Nike plans to mitigate these costs through "surgical price hikes," production base diversification, and supply chain shifts, which in the short term will reflect in balancing expense rates and gross margin. If EPS declines 40.64% as per consensus, the market will watch the extent of expense adjustments and the future gross margin trajectory over the next two quarters. The transitional period of production diversification might disrupt supply and new product launch cadences, with management's execution on expense control and pricing strategy directly impacting profit recovery speed and stock price elasticity judgment.
Analyst Opinions
Recently, several institutions increased Nike's target price and earnings expectations following the previous quarter's earnings report, with a predominance of positive views. Morgan Stanley stated "Nike’s fundamentals may have bottomed," raising the target price from $61.00 to $64.00 while maintaining an equal-weight rating. Citi highlighted "last fiscal quarter sales exceeded expectations," raising the target price to $68.00. UBS noted "the shift is faster than expected, with inventory improvement and a better-than-expected sales outlook," increasing the target price to $63.00. According to Reuters' earnings preview, rating structures show a high proportion of "Buy/Strong Buy," reflecting market confidence in ongoing inventory management and new product drivers. Overall, positive views prevail primarily due to: actual values of revenue and profit exceeding consensus last quarter, improved visibility on channel and inventory metrics, and medium-term positive impacts of product mix restructuring on gross margin. While short-term profit pressure is anticipated, marginal improvement signals are clear. If revenue achieves modest growth and expense pressure remains controllable this quarter, institutions predict subsequent profit recovery.
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