Here’s what Wall Street is saying about Nike ahead of Q4 earnings

Nike (NKE) is expected to report results on its fiscal fourth quarter on Thursday, June 27, with a conference call scheduled for 5:00 pm EDT. What to watch for:

GUIDANCE: In March, Nike forecast Q4 revenue to be up slightly, with gross margin expansion of 160-180 basis points. The company backed its fiscal 2024 revenue view of up 1%, with gross margin expansion of 120 basis points. Analysts currently expect Nike to report Q3 revenue of $12.85B and FY24 revenue of $51.65B. Shares of Nike fell about 5% in the aftermath of the Q3 results and are down about 12% year-to-date. In conjunction with its earnings report, Nike said its expects revenue and earnings to grow in fiscal 2025 and forecast first half 2025 revenue down low single digits.

Truist said that the firm does not see a significant shift in the management’s tone and prior outlook calling for low single digit revenue decline in the first half of FY25. Nike’s decision to pull back supply of key franchises to help build more excitement around the new launches can help drive long-term value, but investors are likely to remain more cautious on the muted near-term outlook for the company relative to “robust growth” from its peers, the analyst told investors. Wells Fargo believes Nike numbers are again coming down, as impacts from both a tougher macro and their own needed reset will weigh more heavily on the first half of 2025 than originally thought. TD Cowen said the proverbial bar for FY25 seems to be a reiteration of prior guidance issued back in March, but they caution that trends have deteriorated since that update and they expect management to talk down 1H25 numbers.

TIME TO BUY: China’s uneven economy has meant slower sales for Nike, while the high cost of living has also weighed on consumers elsewhere, Teresa Rivas wrote in Barron’s. Nike’s long innovation cycle resulted in inventory problems and created an opening for competitors like Hoka maker Deckers Outdoor (DECK) and On Holding (ONON), which have both climbed roughly 50% this year. It’s a lot of bad news, but much of it is already baked into the stock, with shares trading at a 25% discount to their historical average. What’s more, Nike appears to have new shoes coming that could excite shoppers again, while the Summer Olympics, set to start in late July, should be another catalyst for the stock, the author says.

LARGELY DERISKED: Nike over the past several quarters has “struggled significantly amid a confluence of unfavorable external and internal hindrances,” which have weighed meaningfully upon sales growth and profit expansion, Oppenheimer told investors in a research note. The firm said that while Inkle’s challenges persist, it is increasingly of the view that multiples at which shares trade and nearer-term financial expectations are now largely “derisked” and poised to rebound gradually. Opco’s more constructive call on shares is generally intermediate to longer-term in focus. The firm reinstated Nike as a top mega-cap pick across its coverage. It believes a turnaround is underway at Nike as senior leadership recently outlined a significant cost re-alignment and strategic re-focusing geared towards strengthening innovation and marketing and re-establishing key consumer touchpoints.

SENTIMENT: Click here to check out Nike’s recent Media Buzz Sentiment as measured by TipRanks.