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Nike stock (NKE) rallied over 15% on Friday, June 27, after the company’s fiscal Q4 2025 earnings came in much better than feared. Management also sounded optimistic on the outlook as the turnaround under CEO Elliott Hill takes shape. In this article, we’ll discuss whether Nike, which is still in the red for the year despite last week’s rally, is out of the woods.
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To begin with, let’s dive into Nike’s Q4 earnings. The company’s revenues fell 12% year-over-year to $11.1 billion, but the results were better than the company’s guidance, which called for a sales decline in the “mid-teens range, albeit at the low end.” The number also came in ahead of $10.72 billion that analysts were expecting.
The company’s earnings per share (EPS) fell 86% year-over-year to $0.14 but came in $0.01 higher than Street estimates. Hill admitted that while the Q4 results were in line with the company’s expectations, they “are not up to the Nike standards.”
The company expects sales in the current quarter to fall “mid-single digits” and gross margins to contract between 350-425 basis points. Nike did not provide guidance for the current fiscal year due to the tariff uncertainty. However, pointing to its pipeline of products, Hill said, “I see a clear path to recovery ahead.” He added, “From here, we expect our business results to improve. It’s time to turn the page.”
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Here are some of the other key takeaways from Nike’s Q4 report
Recovery in China Will Take Longer: During the earnings call, Hill admitted that compared to other regions in the Asia Pacific and Latin America (APLA) region, recovery in China will “take longer due to the unique characteristics of the marketplace.” China has been a difficult market for U.S. companies, whether they focus on cars, fast food, or smartphones.
Tariff Impact: Nike said that the current tariff regime would add an incremental $1 billion to its gross costs in the current…
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