Nike Inc. (NYSE: NKE) experienced a significant surge in its stock price on June 27, 2025, following the release of its fiscal fourth-quarter earnings report, which surpassed analyst expectations. The company’s shares closed at $72.04, marking a 15% increase and leading the S&P 500 gainers for the day.
The positive market reaction comes despite a challenging quarter for Nike, characterized by a 12% decline in revenue to $11.1 billion and an 86% drop in net income to $211 million, or $0.14 per share. These figures, however, exceeded Wall Street’s forecasts, which anticipated earnings of $0.12 per share on revenue of $10.7 billion.
Nike’s Chief Financial Officer, Matt Friend, acknowledged the hurdles faced during the quarter, including a projected $1 billion impact from tariffs related to U.S.-China trade tensions. To mitigate these costs, the company plans to implement strategic price increases in the U.S. market and diversify its supply chain by reducing reliance on Chinese manufacturing. Currently, 16% of Nike’s U.S. footwear imports come from China, a figure expected to drop to the high single digits by the end of fiscal year 2026.
Under the leadership of CEO Elliott Hill, who returned from retirement last year, Nike is executing a turnaround strategy dubbed “Win Now.” This plan focuses on refocusing the company’s efforts on core sports markets and away from lifestyle trends. Hill emphasized the company’s commitment to athletes, stating, “When we focus on sport, we win.”
The company’s direct-to-consumer (DTC) sales faced challenges, with digital sales decreasing by 26%. However, Nike-owned stores saw a 2% increase in sales, indicating some resilience in physical retail channels. Additionally, Nike plans to reintroduce its products to Amazon, aiming to boost sales and exposure.
Analysts responded positively to Nike’s earnings report. JPMorgan raised its price target for Nike shares from $56 to $64, maintaining a “neutral” rating. HSBC upgraded its recommendation from “hold” to “buy,” citing the company’s progress in its turnaround efforts.
Despite the upbeat earnings report, Nike faces ongoing challenges, including reduced consumer spending in the U.S., brand fatigue, and growing anti-American sentiment in international markets like China. The company is also contending with increased competition from brands like Lululemon and Hoka, which have gained market share in the athletic apparel sector.
Looking ahead, Nike anticipates a mid-single-digit percentage decline in sales for the current quarter, with gross margins expected to decrease between 3.5 and 4.25 percentage points, including a 1 percentage point impact from current tariff rates. Nevertheless, the company remains focused on its strategic initiatives to drive future growth.
Nike’s recent performance indicates that its strategic adjustments are beginning to yield results, restoring investor confidence and positioning the company for potential recovery in the competitive athletic apparel market.
