Nike (NKE) has reported Fiscal fourth-quarter financial results that beat Wall Street forecasts across the board.
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The Beaverton, Oregon-based manufacturer of sneakers and athletic apparel announced earnings per share (EPS) of $0.14, which was slightly above the $0.13 consensus estimate of analysts. Revenue for the quarter totaled $11.10 billion, which beat the $10.72 billion expected on Wall Street. Sales were down 12% from a year earlier.
In its earnings release, Nike said that its Fiscal fourth-quarter results represent the “largest financial impact” from its turnaround strategy and that the headwinds it faces are likely to moderate in coming quarters. “I am confident in our ability to navigate through this current dynamic and uncertain environment by focusing on what we can control,” said Nike Chief Financial Officer (CFO) Matt Friend.
Nike’s net income. Source: Main Street Data
Turnaround Strategy
Nike is in the midst of a multi-year turnaround strategy prompted by declining sales in the key market of China and a lack of consumer enthusiasm for the company’s sneakers and brand. Last quarter, the sneaker giant warned that its Fiscal fourth quarter would be the low point of its turnaround under CEO Elliott Hill, who took the helm of the company last October.
However, in recent months, Nike’s situation has worsened, particularly with U.S. President Donald Trump’s import tariffs on products made in Asian countries such as Vietnam and China, where the bulk of Nike’s manufacturing occurs. In recent months, Nike has focused on repairing relations with wholesale partners that were severed under previous CEO John Donahoe, and investing in sports innovations and advertisements.
NKE stock has declined 35% in the last 12 months.
Is NKE Stock a Buy?
Nike’s stock has a consensus Moderate Buy rating among 25 Wall Street analysts. That rating is based on 13 Buy and 12 Hold recommendations issued in the last three months. The average NKE price target of $71.48 implies 14.26% upside from current levels. These ratings are likely to change after the company’s financial results.
