Nike’s “Just Do It” ad slogan on Feb. 5, 2025, in London, England- Richard Baker | In Pictures | Getty Images
Nike just gave investors a reason to smile.
The sportswear giant’s stock soared 17% on Friday after CEO Elliott Hill told investors that the company is past the roughest part of its turnaround plan and things are finally starting to improve.
Tough Quarter, But a Brighter Path Ahead
Nike’s fourth-quarter results weren’t pretty:
Sales dropped 12%
Net income fell 86%
Profit margins shrank
But Hill acknowledged the results and emphasized that the company is now turning the corner.
“The results we’re reporting today are not up to Nike’s standards, but our ‘Win Now’ actions are starting to make a difference,” Hill said. “It’s time to turn the page.”
Investors Feel Reassured
Initially, Nike’s stock dipped after the earnings report came out Thursday. But once Hill and his team spoke on the earnings call, confidence grew—and so did the stock price, jumping over 10% in after-hours trading. By Friday morning, shares had soared 17%.
Banks like HSBC praised the company’s progress, upgrading Nike to a “Buy” rating for the first time in over three years. HSBC also raised its price target to $80, suggesting the stock could rise another 28%.
“It’s been a long time coming,” said HSBC analyst Erwan Rambourg. “But we finally see clear signs that Nike is on the path to recovery.”
Fresh Strategies and Product Buzz
Nike has been working hard behind the scenes. Here’s what’s new:
Amazon comeback: Nike will start selling on Amazon again for the first time since 2019.
Women-focused launches: Over 200 women’s stores like Aritzia now carry new Nike products.
Star power: Its new collection with WNBA star A’ja Wilson sold out in just 3 minutes.
Nike is also working to rebuild relationships with wholesale partners—key to rebuilding its retail footprint.
Not Out of the Woods Yet
Despite the optimism, Nike still faces challenges:
Sales are expected to decline by about 7% this quarter.
The company is clearing out excess inventory, especially from once-popular lines like Dunks, Air Force 1, and Air Jordan 1. These styles saw sales drop over 20% in the last fiscal year—and 30% in Q4 alone.
Heavy discounts to move old products are eating into profits.
CFO Matt Friend admitted Nike’s earnings will remain under pressure through the first half of fiscal 2026 due to excess inventory and high tariff costs.
So When Will Growth Return?
That’s still unclear. CEO Hill didn’t commit to a timeline for when Nike will return to revenue growth, saying:
“We’re taking it 90 days at a time. Full recovery will take time.”
Summary:
Nike’s turnaround is finally showing promise. While sales and profits are still down, the worst appears to be over. New product launches, fresh retail strategies, and investor confidence have given the stock a major boost. But with inventory issues and global economic challenges still looming, Nike’s full recovery may take a bit longer.
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