MW Does Nike need to look to the '90s to make a comeback? Wall Street braces for potentially 'painful' earnings, awaits stock to bottom out.

By Bill Peters

'Nike has a history of missing key trends,' analyst says

With Nike Inc.'s fourth-quarter results due on Thursday, some analysts say the company's sluggish sales and stock price should reach the bottom soon - if not now, then in the months ahead - after struggling with competition, squeezed consumers and weaker sneaker demand over the past few years.

However, Nike's stock $(NKE)$ is still down 19.5% so far this year. Analysts' expectations aren't exactly high. Raymond James analysts predict a "less-bad" quarter, but Jefferies said the results would still be "painful," and others say the athletic-gear maker has lost some of its relevance.

Under Elliott Hill, Nike's new chief executive, the company has tried to focus more on the needs of athletes, shake up leadership, roll out bolder marketing campaigns and make its displays more appealing inside sneaker stores. It has struck a partnership with Kim Kardashian's SKIMS clothing brand and announced plans to start selling products directly again on Amazon.com Inc. $(AMZN)$.

Still, the company in the past has struggled to appeal to women, and analysts generally agree that its turnaround will take time. Some recent data shows continued declines in foot traffic in Nike's own stores.

TD Cowen analyst John Kernan said in a research note Wednesday that Nike "is still losing share to On, Brooks, Asics, NB, Hoka and Skechers, particularly to older/higher-income consumers. [Management] needs to take a bolder approach to marketing and innovation, akin to Nike Air movement in '90s."

"Nike is unlikely to lose its No. 1 positioning in the market, but it is at risk of losing share to relevant competitors," he added later.

What to expect

Earnings: Analysts polled by FactSet expect Nike to report adjusted earnings of 13 cents a share.

Sales: Wall Street expects $10.73 billion in sales.

Stock: Over the past 12 months, Nike's stock has fallen 35.2%.

What other analysts are saying

Thursday's results will mark the end of Nike's fiscal 2025. Kernan said he believes fiscal 2026 "will mark the trough" for Nike's gross margins. Similarly, Jefferies analyst Randal Konik, in a note Tuesday, said the fourth-quarter results "should mark the trough for fundamentals."

Konik said Nike was making progress on clearing out unwanted sneakers, after shoppers eventually got tired of the flood of Panda Dunks, Air Force 1s and other, more casual, sneakers. Running shoes like the Vomero and Pegasus offer signs of hope, he said, adding that he expects the company to launch new running styles.

And he said that Nike was strengthening its relationships with outside retailers, after efforts to sell more product online and through its own stores ran up against competition and other complications.

"Declining foot traffic to Nike stores revealed the limitations of the company's [direct-to-consumer]-first strategy and validates the company's recent pivot back to major wholesale partners like Macy's and DSW," Placer.ai, a firm that analyzes retail traffic, said in a report this month.

The report added that while Nike's own stores were good at attracting the wealthiest families, young professionals and what it called "educated urbanites," chains like Designer Brands' $(DBI.AU)$ DSW and Dick's Sporting Goods Inc. $(DKS)$ reached more suburban families. Macy's Inc. $(M)$ and Foot Locker Inc. $(FL)$, the report said, appeared better at reaching younger, single people in cities and some families in areas close to urban areas.

"Data shows that retail partners are not redundant channels but are crucial for extending Nike's reach, connecting the brand with distinct psychographics that its own stores capture less effectively," the report said.

Kernan, at TD Cowen, said Nike has struggled to keep up with consumers' sneaker preferences.

"Nike has a history of missing key trends - the low-profile, comfort, easy on/easy off," he said. "Adidas, on the other hand, has capitalized on trends - namely the low-profile - and will likely see continued success with this trend going into the fall holiday."

"Nike used to own the performance as fashion space," he added, "but recently the brand has been ceding space to competitors."

-Bill Peters

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June 25, 2025 16:14 ET (20:14 GMT)

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