Nike, Inc. is expected to report a slight decline in sales and earnings when it reports results for the fiscal fourth quarter ended May 28 when it reports its full year results next Tuesday, July 11, but the big focus for analysts will be on whether go-forward guidance will be scaled back again amid signs of softness in China and the EMEA, and questions about the strength of the North America recovery.
The prospect that Nike may become more conservative in its guidance increased following news on June 23 that David Denton, former CFO at Pfizer and Lowes, would succeed current CFO Matt Friend, effective August 17. Several analysts also see an Investor Day planned for this fall may be postponed due to the hire. (See more at bottom)
Nike warned on March 31 while reporting fiscal third-quarter results that sales would fall by a low single-digit percentage for the remainder of the calendar year, which was below analysts’ expectations. The news caused shares to slide and resulted in several analyst downgrades.
In reporting the hiring of Denton, Nike also said Q4 results include a benefit from tariff refunds that were not contemplated in the company’s previously provided guidance. The extent and timing of tariff refunds are expected to be another key topic on Nike’s fourth-quarter analyst call.
Nike further said that, excluding a one-time benefit from tariff refunds, fourth quarter results are expected to be “generally in line with previously provided guidance.”
In reporting third-quarter results, Nike said it expects fiscal Q4 revenue to be down 2 percent to 4 percent, with modest growth in North America despite lapping significant liquidation efforts in the prior year, more than offset by declines in Greater China and Converse. China’s sales are projected to be down approximately 20 percent in the fourth quarter, reflecting reduced sell-in and accelerated inventory clean-up actions.
Nike also forecast gross margins declining by 25 to 75 basis points, including 250 basis points due to higher tariffs in North America, and SG&A expense to be flat to down slightly in dollars.
Analysts’ consensus EPS estimates range from 11 cents to 12 cents for the quarter, down from 14 cents a year ago. Revenues are expected to be $10.88 billion, down 2 percent from the year-ago quarter.
At Needham, Tom Nikic, who has a “Hold” rating on Nike with no price target, in a quarterly-preview note issued June 25, raised his EPS estimates for the quarter and for FY27 due to the tariff-refund benefit that had previously been excluded from guidance. However, he remains “cautious” on Nike as the “pace of the turnaround remains frustratingly slow.”
Needham’s recent checks suggest the domestic demand, particularly DTC, remains pressured. Nikic wrote, “Credit-card tracking data worsened QoQ in Q4 (and worsened further QTD), we’re still seeing signs of weakness at Jordan, and discounting is elevated YoY.”
He added that the EMEA region has become “far more challenged market recently,” with other softline brands and retailers calling out challenges there. Nikic further said the arrival of a new CFO transition will “likely behoove NKE to provide conservative initial guidance.” Finally, he questioned whether the recent move to shift two-time MVP Shai Gilgeous-Alexander’s endorsement deal from Converse to the Nike brand might signal that a Converse sale may be in the offering. Nikic wrote, “We don’t think a Converse sale would be material to the P&L, but it could allow management to focus more intently on Nike/Jordan.”
BTIG, in a June 25 preview note, lowered its estimates for Nike, citing a “more conservative outlook” due to the new CFO hire, and consequently reduced its price target to $55 from $75 to align with updated estimates. Analyst Bob Drbul maintained his “Buy” rating on Nike’s stock, noting that he remains encouraged by the initiatives the company is undertaking to improve its brand positioning.
Drbul said in a note, “While we remain constructive on the long-term opportunity at Nike, the turnaround is clearly taking longer than expected and near-term visibility around product, innovation, channel mix, and demand stabilization remains somewhat limited.”
Drbul expects the investor call to continue to focus on the brand’s turnaround progress, particularly in China, as well as the sustainability of the North American improvements. He said, “China continues to be a focal point for investors, and we expect that to remain the case heading into 4Q.”
Bank of America’s Lorraine Hutchinson, in a June 24 note, said comments about slower-than-expected wholesale sell-through in North America on Nike’s third-quarter call raised investor concerns, and she expects an update on North American wholesale trends to receive a big focus on the investor call. She wrote, “Wholesale weakness could lead to discounts, product buybacks or slower reorders. We also see risk to the positive North America sales trend in 2Q27, when Nike laps 24 percent wholesale growth, driven in part by off-price sell-in.”
A second major topic on the call is Bank of America’s expectations for China, where Hutchinson expects the performance will likely “get worse before it gets better.”
Hutchinson reiterated her “Neutral” rating on Nike at a $53 target. The analyst stated, “We think estimates are nearing a bottom, but the path to a clean sales reacceleration is uncertain amid the reset in China, Sportswear normalization and volatile macro conditions. Innovation and North America are positives, but the timeline for a sales recovery in China and stabilization in Europe is less certain.”
In a note issued June 18, analysts at Barclays, led by Adrienne Yih, reiterated their “Overweight” rating on Nike at a $67 price target. Yih wrote that she believes negative sentiment on Nike’s stock is tied to “structural pressure” in China and concerns over share losses to competitors in both the running and lifestyle categories.
Yih stated, “Without concrete evidence that the ‘Sport Offense’ strategy is working, investor sentiment hinges on a debatable narrative, which makes it difficult to prove or disprove NKE’s fundamental turn. Key tenets of a recovery thesis include: 1) North America’s early stabilization in wholesale should drive DTC; 2) Greater China stabilization is sufficient for NKE stock to work; 3) sport-led innovation beyond running success can halo out to rebuild brand equity; and 4) margins that are at or near the trough with margin improvement before sales recovery.”
In a June 10 note, Paul Lejuez at Citi Research reiterated his “Neutral” rating and trimmed his price target on Nike from $53 to $47 to reflect the company’s slower-than-expected margin recovery. Lejuez believes fiscal 2027 guidance will be the focus of the fiscal fourth quarter call, noting that Nike had already signaled softer trends in the first half of the fiscal year. The analyst wrote, “On regions, we expect results to be similar to 3Q trends (NAM solid but EMEA and China weak). On China, we believe trends will remain sluggish for the foreseeable future and possibly even into 2H27. Overall, based on convos w/investors, we believe sales pressure is expected in F27 with GM improvement (up in 2H27).”
Beyond overall guidance and China’s recovery, Lejuez believes other key discussion points on the call will include the health of inventory levels in EMEA and North America, including progress in cleaning up sportswear and classic footwear styles, as well as the extent to which higher oil and energy prices may pressure input costs and gross margins in fiscal 2027.
Telsey Advisory Group’s (TAG) Cristina Fernández, in a June 22nd note, expects Nike to show progress in the fiscal fourth quarter on its “Win Now” actions, particularly in North America, helping offset headwinds in China and EMEA. She wrote, “In NA, we expect growth in both wholesale and DTC, as e-commerce promotions seem to have stabilized YoY. Wholesale should have benefited from the sell-in of World Cup merchandise, mostly in apparel.”
TAG is modeling that currency-neutral sales will decline 3.9 percent in the fourth quarter, with a 3 percent gain in North America helping offset declines of 3 percent in APLA, 4 percent in EMEA, and 20 percent in China.
Fernández maintained her “Market Perform” rating at a $55 target. She wrote, “Overall, Nike is making the right moves by cleaning up inventory, rebalancing the product portfolio by increasing newness and reducing the focus on classic franchises, and strengthening relationships with wholesale partners. However, the turnaround is progressing at a slow pace, and there remains significant work to revitalize the entire product portfolio and right-size its international businesses (58 percent of FY25 sales).”
Williams Trading‘s Sam Poser on June 23 trimmed his FY27 and FY28 EPS estimates after reassessing SG&A expectations, but he sees fourth-quarter results slightly beating consensus estimates and continues to expect a positive revenue increase by the third quarter of Nike’s current fiscal year, driven by accelerating North America growth.
Poser reiterated his “Buy” rating at a $57 target. He wrote, “Nike is poised to get off the snide as the World Cup gets underway. Nike’s World Cup efforts, including team kits, and Nike Sportswear footwear and apparel, make us more confident that there’s light at the end of the tunnel. We recognize that business in Greater China is taking longer than expected to turn around. However, we believe that poor decisions by Nike management in the not-so-distant past resulted in handing share to its competitors. We do not believe that Nike’s competitors took a share. Such share donations have occurred, to a lesser extent, in other geographies. Nike is making the right moves to reverse the donations, and such a reverse is becoming evident in North America, and just underway in Europe.”
At Wells Fargo, Ike Boruchow, in a June 23 note, reiterated his “Equal Weight” rating at a target of $45. He believes the CFO transition announcement raises questions about whether Nike’s assurances that Q4 results were “generally in line” with previously provided guidance mean they exceeded guidance, given that Nike has typically beaten guidance since Elliot Hill took over as CEO in late 2024. He also wondered whether the prior calendar-2026 guidance would be pulled and whether the upcoming investor day would be canceled, given the CFO change.
Boruchow noted that it’s unclear how much of the tariff refund Nike expects, as well as when it will be reflected in the income statement. He said, “While not material to out-year estimates (the benefit will reverse out next FY), this will add some noise to their 4Q.”
Stifel, in a June 25 note, lowered its price target to $50 from $56, citing the new CFO announcement as reducing the likelihood that Nike will exceed guidance for the current calendar year in its third-quarter results.
Analyst Peter McGoldrick wrote in a note, “We are not ready to call a bottom on NKE shares ahead of the F4Q26 report. Our thesis states that dominant market position is unlikely to translate to value creation absent 1) a favorable change in consumer preference, or 2) a reinvigoration of the innovation pipeline at scale. With lackluster athletic market performance and market share erosion, we point to challenger brands as offering better risk/reward. Investors will focus on FY27 guidance, capacity for topline growth, and EBIT margin rebound from trough levels in FY26.”
Image courtesy Nike
See below for additional SGB Executive coverage of Wall Street’s expectations for Nike’s Call next week:
EXEC: Wall Street Eyes Benefits and Risks in Nike’s CFO Transition
EXEC: Nike Shares Downgraded on Concerns Over Another Guidance Cut
