A shopper walks past a Nike store, as global markets brace for a hit to trade and growth caused by U.S. President Donald Trump’s decision to impose import tariffs on dozens of countries, in the King of Prussia Mall in King of Prussia, Pennsylvania, U.S., April 3, 2025.
Rachel Wisniewski | Reuters
Nike is expected to report poor quarterly results on Thursday after it warned investors that the low point of its turnaround could come in its fiscal fourth quarter.
But since Nike issued that warning in March, conditions have worsened for the sneaker giant, leading some investors to question if the worst is still to come for its sales and profits.
Nike was contending with a 20% tariff on goods imported from China at the time, but President Donald Trump has since raised that duty to 30%. The first product from its highly anticipated partnership with Kim Kardashian’s intimates line Skims was supposed to launch during the quarter, but now that’s been delayed to later this year, CNBC previously reported.
As part of its turnaround, Nike has been using discounts and clearance channels to offload stale inventory from its retro lines. But those efforts have “clearly been tougher than expected,” which means its profits could still have more room to fall before they get better, Evercore said in a research note Monday.
Conditions in the key China market have also deteriorated since March, which is further weighing on sentiment, Evercore said.
While some factors have worsened since Nike last reported earnings, there are signs that its 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 – as long as those hikes don’t turn consumers off.
Consumer sentiment has rebounded from last quarter and Nike’s sales could have benefited from a decent April, when many customers moved up purchases, potentially to avoid higher prices from tariffs. Still, that uptick was short-lived, as U.S. retail sales declined more than expected in May.
Here’s what analysts are expecting the world’s largest sneaker company to report for its fiscal fourth quarter, according to consensus estimates from LSEG:
Earnings per share: 13 cents per shareRevenue: $10.72 billion
Since Elliott Hill took over as Nike CEO in October, he has focused on winning back wholesale partners after former Chief Executive John Donahoe pursued a direct selling strategy that contributed to a sales and profit decline.
The company has said it expects its direct channels, meaning its website and its stores, to see a sales decline as it moves inventory back to wholesalers. While foot traffic at Nike stores has been down since Hill took over, conditions started to improve in May, according to Placer.ai, an analytics firm that uses anonymized data from mobile devices to estimate overall visits to locations.
Monthly visits to Nike stores dropped 10.2% in April compared with the previous year, but that decline narrowed to 3.2% in May, according to Placer.ai.
Investors will be most interested in Nike’s guidance when the company hosts its earnings call at 5 p.m. ET. But Wall Street will also be looking out for any changes to its turnaround timeline, insight into its product launch pipeline and details on whether it will cut more expenses.
Plans for Nike’s partnership with Skims will also be a key point of interest. Beyond clearing out stale inventory and releasing more innovative styles, Nike is working to win over more female shoppers, who are estimated to represent about 40% of its business.
This gender gap is not ideal for discretionary retailers because women tend to spend more on clothes than men. Nike has lost market share to athletic apparel competitors like Lululemon and Alo Yoga, which cater to a similar customer but are more geared toward women.
Sneakers are still the most important part of Nike’s business, but apparel is a growth area for the company, representing about 28% of Nike brand revenue in fiscal 2024.
