Nike The shares shot 17% on Friday after the company said the worst of its struggles is behind this, after a fourth trimester fiscal earnings report better than tremor.
On Thursday, Nike reiterated that he would take the greatest financial success of his response plan during the quarter, which worried investors who worried that the tariffs of President Donald Trump about the key manufacturing centers of Nike as China and Vietnam would derail the company's return.
Nike registered a poor quarter quarter, since sales fell by 12%, net income fell 86% and earnings decreased. But CEO Elliott Hill emphasized that the company has emerged from the worst of its fall, and the fall of sales and profits would begin to moderate in the rooms.
“The results we report today in the fourth quarter and in fiscal year 2015 are not up to the Nike standard, but as we said 90 days ago, the work we are doing to reposition the business through our 'Win Now' actions is to have an impact,” said Hill in a gain call, referring to the name of the company's change plan. “From here, we hope our commercial results improve. It's time to change the page.”
With few details about the progress of Nike's response strategies at the company's profit launch, the company's actions initially fell when they published results after the closing bell on Thursday. At the end of a one -hour call with Nike executives and Wall Street analysts, the action had increased more than 10% in extended trade.
Beyond assuring investors that the response plan is working, Hill shared promising updates on new products and Nike's efforts to recover wholesale partners, who have been key focus areas since he assumed the position in October.
Hill shared details behind Nike's decision to start selling in Amazon For the first time since 2019 and their impulse to win the buyers, another priority for the company.
During the quarter, the company launched products in more than 200 LED stores for women, including Aritzia, and launched its collection with the WNBA star A'JA Wilson, which Hill said he sold out in three minutes.
For Friday morning, the actions rose even more after numerous banks issued bull comments about the company. HSBC He updated Nike to buy from Hold, his first purchase rating in the action in 3 and a half years.
HSBC also increased its target price to $ 80, which implies 28% upwards from the end of Thursday.
“A lot in creation, but we believe that inflection is finally here,” analyst Erwan Rambourg wrote in a research note. “We believe that there is more than tangible evidence that Nike has a path to see its sales rebound in the not too distant future, and its margins to be repaired, and this despite a wind in front of unfavorable tariffs.”
Nike's results show that the company is recovering in a timeline that Wall Street likes. But don't call him a return yet.
The giant of the shoes is trying to grow again at an unstable moment for the economy, since the feeling of the weakest consumer, the increase in debt, rates and mass deportations ask questions about spending and GDP.
Nike still expects sales to decrease in their current quarter in a percentage of middle digits, in line with Wall Street expectations of a 7%drop, according to LSEG.
He also has more work to do to eliminate the inventory of rancid lifestyle from his classic Dunks and Jordan Lines. These efforts to liquidate the old inventory have Bust gain and sales margins because Nike has had to depend on deep discounts, authorization channels and the off -price sector to eliminate that excess.
In fiscal year 2025, which ended last month, sales of classics such as Air Force 1, Air Jordan 1 and Dunks decreased more than 20% compared to the previous year. In the fourth quarter, that accelerated at 30%, which impacted sales by almost $ 1 billion, said Finance Chief Matt Friend.
The inventory levels of Air Force 1 have begun to stabilize, but Nike is still working to eliminate the supply of its immersion franchise, which will affect the company's profits during the first half of its current fiscal year, friend said.
Both Hill and his friend said that Nike's profits will be under pressure through the first half of fiscal year 2026, since it works through their inventory and affirms with the highest costs of tariffs. They said they expect profits to improve in the second half of the year.
However, when it comes to the real growth of sales, it is still too early to know when the company will stop shrinking.
When asked if there is any scenario in which the company could return to income growth this year, Hill declined to share a timeline.
“Just for everything that is happening, we will take 90 days at the same time,” said Hill. “We believe that complete recovery will take time.”
Correction: This article has been updated to correct Aritzia's spelling.
