Nike Earnings Loom: Can Shares Bounce?

NIKE NKE shares have experienced suboptimal price action over recent years, underperforming significantly on the back of quarterly results that have shown muted growth.Tariff exposure has not helped sentiment either in 2025. In addition, the company has largely been unable to capture consumers’ wants, helping further explain NKE’s recent struggles.But with the company on deck to reveal quarterly results this week – can we expect a positive showing? Let’s take a closer look.Can Nike Shares Bounce?Weak quarterly results have been a major thorn in NKE’s side for multiple periods now, regularly dragging down sentiment. An inability to capture consumers’ wants post-COVID has been a big red flag, also attributing big to the weak sales growth.Below is a chart illustrating the company’s sales on a quarterly basis.Image Source: Zacks Investment ResearchPositive commentary surrounding upcoming periods was enough for the stock to enjoy a nice post-earnings rise following its latest release, but results were primarily soft. Sales of $11.1 billion throughout the period fell 12% YoY, whereas its gross margin contracted to 40.3% vs. 44.7% in the same period last year.Below is a chart illustrating the company’s margins on a quarterly basis. Please note that the values are calculated on a trailing twelve-month basis.Image Source: Zacks Investment ResearchHeadwinds that are expected to moderate in the coming periods, according to CEO Matthew Friend, help explain the surge post-earnings, perhaps indicating that the ‘worst’ may be over. EPS revisions for the quarter have been stable, with the current $0.60 Zacks Consensus EPS estimate reflecting a 60% year-over-year decline.Revenue revisions have actually shown a nice chunk of positivity, with the $11.0 billion expected getting revised 0.5% higher over the last several months. Sales are expected to decline 5% year-over-year, reflecting another period of soft sales.Image Source: Zacks Investment ResearchStill, it’s worth noting that while the YoY sales growth rate is expected to be negative, the forecasted decline is vastly improved relative to other recent periods of -12%, -9.3%, and -7.7% across its last three periods, respectively.And the stock certainly doesn’t reflect a strong value proposition right now, further reinforced by its Style Score of ‘D’ for Value. Shares presently trade at a 35.1X forward 12-month earnings multiple, well above the 30.8X five-year median and reflecting a 50% premium relative to the S&P 500.Image Source: Zacks Investment ResearchBottom LineNIKE NKE has found itself in a tough position post-COVID, struggling to capture consumers’ wants and facing declining sales as a result. The stock is currently a Zacks Rank #4 (Sell), warranting deserved caution.It currently seems that investors would be better off staying away from shares until we see positive guidance, which could come following its release this week. But over recent years, the company has struggled to right the ship.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NIKE, Inc. (NKE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks