Will Nike Overcome Sales Slump Under New CEO Elliott Hill?
Nike Inc. (NYSE: NKE) is set to report fiscal third-quarter earnings after market close on Thursday, March 21, as investors assess the company’s progress under new CEO Elliott Hill.
Despite declining revenue and profit expectations, analysts maintain a cautiously bullish stance, signaling potential long-term recovery prospects.
Nike Earnings Forecast: Declining Sales, Lower Profits Expected
Analysts project Nike’s Q3 revenue to come in at $11.02 billion, a drop from $12.43 billion in the same quarter last year.
🔹 Expected EPS: $0.28 (down year-over-year)
🔹 Revenue Forecast: $11.02 billion (-11% YoY)
Nike has been facing weaker consumer spending, inventory challenges, and increased competition, especially from emerging sportswear brands and direct-to-consumer (DTC) competitors.
Stock Performance:
📉 Nike shares are down nearly 30% over the past 12 months, closing last week at $72 per share, near their lowest levels in three years.
Wall Street Sentiment: Mixed but Mostly Positive
According to Visible Alpha, Wall Street remains split on Nike’s outlook:
✔️ 9 analysts rate Nike a “Buy”
✔️ 7 analysts hold a “Neutral” stance
✔️ 2 analysts recommend “Sell”
📊 Average Price Target: $82, indicating a 14% upside from Friday’s closing price.
While some analysts see room for outperformance, others remain cautious about Nike’s growth trajectory and turnaround efforts.
CEO Elliott Hill’s Strategy: Can Nike Reverse Its Decline?
Thursday’s earnings report marks Nike’s second under Elliott Hill, who became CEO in October 2024.
Hill has emphasized revamping product innovation, strengthening DTC sales, and increasing marketing efforts, particularly targeting female consumers.
Key Strategic Initiatives:
✅ Nike x SKIMS Collaboration: A partnership with Kim Kardashian’s SKIMS for a new product line, aimed at boosting female engagement and athleisure sales.
✅ Super Bowl Ad Campaign: Featuring top female athletes, reinforcing Nike’s commitment to inclusivity and branding.
✅ Digital & Direct-to-Consumer Expansion: Strengthening e-commerce and direct sales, a key area where Nike has lagged behind rivals like Adidas and Lululemon.
Morgan Stanley: “Slight Outperformance” Possible, but Risks Remain
Morgan Stanley analysts recently noted potential for a slight earnings beat in Q3, but remain cautious about long-term growth prospects.
🔹 Concerns:
- Weak China sales amid economic uncertainty
- Pressure from discounting and promotional activity
- Inventory management struggles
Morgan Stanley maintains a “neutral” stance on Nike stock, preferring to stay on the sidelines until clearer growth signals emerge.
Key Earnings Metrics to Watch
Investors will closely analyze:
📌 North America & China Sales Trends – Key revenue drivers facing challenges
📌 DTC vs. Wholesale Performance – Shift toward direct sales vs. reliance on retail partners
📌 Profit Margins & Inventory Levels – Indications of pricing power and efficiency
📌 Forward Guidance for Q4 & FY2025 – Any revisions in growth outlook
Bottom Line: Nike Faces a Critical Earnings Moment
Nike’s Q3 report will test investor confidence in its turnaround strategy under Elliott Hill.
With declining sales and stock performance, Nike must prove that its marketing push, product innovation, and digital expansion can drive long-term growth.
📢 If Nike beats expectations and provides strong forward guidance, the stock could see a rebound.
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