Nike (NKE) stock spiraled Wednesday after the athletic apparel and footwear retailer reported mixed results for its fiscal first quarter, withdrew its full-year guidance and postponed its investor day.
Indeed, NKE fell nearly 7%, easily making it the worst Dow Jones stock of the session.
In the three months ended August 31, Nike's revenue decreased 10.4% year over year to $11.6 billion. Its earnings per share (EPS) slumped 25.5% from the year-ago period to 70 cents.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"Nike's first-quarter results largely met our expectations," said Nike Chief Financial Officer Matthew Friend in a statement. "A comeback at this scale takes time, but we see early wins – from momentum in key sports to accelerating our pace of newness and innovation."
The results were mixed compared with what analysts were expecting. Wall Street was anticipating revenue of $11.65 billion and earnings of 52 cents per share, according to Yahoo Finance.
As a result of Nike's upcoming CEO switch, with Elliott Hill replacing John Donahoe later this month, the company withdrew its full-year guidance and postponed its investor day.
"Given our CEO transition and with three quarters left in the fiscal year, we are withdrawing our full-year guidance. We intend to provide quarterly guidance for the balance of the fiscal year," Friend said on Nike's conference call. "This provides Elliott with the flexibility to reconnect with our employees and teams, evaluate the current strategies and business trends, and develop our plans to best position the business for fiscal 2026 and beyond."
Nike had previously forecast revenue to be down in the mid-single digits in its current fiscal year.
Is Nike stock a buy, sell or hold?
Nike has been running up the price charts in recent months, rallying nearly 20% from late June through the October 1 close. Still, shares remain roughly 23% lower for the year to date, including Wednesday's post-earnings plunge.
Nevertheless, most of Wall Street remains bullish on the blue chip stock. According to S&P Global Market Intelligence, the average analyst target price for NKE stock is $91.91, representing implied upside of more than 10% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm Stifel, however, has a Hold rating and a $79 price target on NKE stock.
"NIKE remains the #1 athletic brand with enviable scale advantage and a history of innovation," says Stifel analyst Jim Duffy. "Lofty market share, increasingly credible competition, and recent footwear share losses, however, are resulting in revenue declines and margin pressure. At the current multiple, we believe a return to growth and margin improvement is discounted in shares suggesting risk/reward largely in balance at current levels."
Related Content
-
How Trump’s Tariffs Could Impact Your Grocery BillTariffs at the checkout: Preparing for higher grocery bills and how to manage them.
-
Six Steps to Simplify Your Estate for Your HeirsA simplified estate strategy will expedite the settlement of your estate after you're gone, lower audit risk, reduce costs and cut your beneficiaries' stress.
-
Six Steps to Simplify Your Estate for Your HeirsA simplified estate strategy will expedite the settlement of your estate after you're gone, lower audit risk, reduce costs and cut your beneficiaries' stress.
-
Three Actions to Protect Wealth Transfer Amid Tax UncertaintyHow should families plan to pass on their wealth amid ongoing uncertainty over estate taxes? Even if TCJA provisions are extended, they might still be temporary.
-
Business Owners: How to Calculate Your Wealth Gap in Five MinutesHow much would you need from the sale of your business to retire without sacrificing your lifestyle? This simple calculation will give you an idea.
-
Stock Market Today: Dow Adds 485 Points After Trump's Tariff DelayThe White House said it will postpone tariffs on automotive imports from Canada and Mexico for one month.
-
10 Ways to Refine Your Financial Plan for a More Secure FutureSignificant benefits throughout the rest of the year can be had if you take some time now to revisit your financial plan and adjust accordingly.
-
The Most Important Number for a Business Owner Considering a SaleCompany owners hoping to sell and stop working won't know whether an offer on their business is good enough unless they know their 'wealth gap.'Evan
-
Stock Market Today: Dow Drops 670 Points on Trade War EffectA prodigious rally by the battered leader of the AI revolution typified an increasingly volatile picture for investors, traders and speculators.
-
Dividing an Estate? Five Ways to Create TransparencyLetting your children know your intentions while you're still around to explain your reasoning, and while you can make adjustments, can limit discontent later.
