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
-
Ask the Editor: Reader Questions on 529 plansIn our latest Ask the Editor round-up, Joy Taylor, The Kiplinger Tax Letter Editor, answers questions related to 529 plans.
-
Americans Worry More About Going Broke in Retirement Than Dying, Study Shows. Here's What to Do.Inflation, taxes and Social Security are the three top concerns for retirees, according to the 2025 Allianz Annual Retirement Study
-
Three Options for Retirees With Concentrated Stock PositionsIf a significant chunk of your portfolio is tied up in a single stock, you'll need to make sure it won't disrupt your retirement and legacy goals. Here's how.
-
Four Reasons It May Be Time to Shop for New InsuranceYou may be unhappy with your insurance for any number of reasons, so once you've decided to shop, what is appropriate (or inappropriate) timing?
-
Stock Market Today: Stocks Rise on Good VolatilityInvestors, traders and speculators continue to process the "known unknown" of global tariff-and-trade war negotiations.
-
Before You Invest Like a Politician, Consider This DilemmaAs apps that track congressional stock trading become more popular, investors need to take into consideration some caveats.
-
How to Put Together Your Personal Net Worth StatementNow that tax season is over for most of us, it's the perfect time to organize your assets and liabilities to assess your financial wellness.
-
Stock Market Today: Trump Retreats, Markets RejoiceStocks rally, yields soften, the dollar rises, and even beaten-down names enjoy the wages of potential trade peace.
-
Tesla Stock Pops as Elon Musk Promises DOGE Draw BackTesla reported a sharp drop in first-quarter earnings and sales, as the EV maker suffered a backlash to its CEO's political ambitions.
-
Bouncing Back: New Tunes for Millennials Trying to Make ItAdele's mournful melodies kick off this generation's financial playlist, but with the right plan, Millennials can finish strong.
