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
-
I'm a Financial Pro: Why You Shouldn't Put All Your Eggs in the Company Stock BasketLimit exposure to your employer's stock, sell it periodically and maintain portfolio diversification to protect your wealth from unexpected events.
-
How Will the One Big Beautiful Bill Shape Your Legacy?The One Big Beautiful Bill Act removes uncertainty over tax brackets and estate tax. Families should take time to review estate plans to take full advantage.
-
Nvidia Earnings: Live Updates and Commentary August 2025Nvidia's earnings event is just days away, and market participants are zeroed in on the AI bellwether's quarterly results.
-
Should You Claim Social Security Early or Late? A Financial Adviser Weighs InThere isn't a wrong age to start claiming Social Security, but there are factors that everyone should consider to avoid leaving money on the table.
-
Three Things Financially Confident People Do, From a Pro Who KnowsIf you have any worries about your retirement future, take back control with these three tips.
-
How Much Do I Need to Retire? A Financial Professional Breaks Down Your OptionsWhat it all boils down to is will you be comfortable in retirement? Some people may rely on formulas, while others just aim for $1 million nest egg.
-
Despite Our Grumbles, America Still Delivers on the Dream: Perspective From a Financial Pro Who's Seen StuffSome of us might complain about the state of our nation (and those concerns are legit), but America still offers unparalleled opportunities and mobility that many people around the world only dream about.
-
Dow Rips 846 Points to New All-Time High: Stock Market TodayFed Chair Jerome Powell seems ready to cut interest rates in the fall but will still rely on incoming economic data about inflation and employment.
