Nike's (NKE) North America should keep improving, World Cup products could help sales, while China is likely to stay weak in the upcoming fiscal Q3 results on Tuesday, BofA said in a note Wednesday.

BofA said it expects Q3 sales to slip 0.4%, despite help from foreign exchange, as gains in North America are partly offset by softer wholesale trends and continued weakness in China, with sales in China estimated to be down 16% and operating margin down 500 basis points.

Gross margin likely fell about 200 basis points in the quarter, in line with company guidance, as tariff costs remained a major headwind, but margins may steady in Q4, the investment firm said.

Nike's rollout of 2026 World Cup fan and performance apparel is starting and should support sales in Q4 and Q1 2027, according to the note.

BofA kept its buy rating and $73 price target while expecting Nike to give Q4 guidance but waiting until June to discuss fiscal 2027.

Price: 52.82, Change: -0.68, Percent Change: -1.26