In the race for sneaker dominance, Nike has been limping along for years—but at long last the footwear failure could be hitting its stride.
Swoosh shares jumped 15.16% after Nike’s fiscal fourth-quarter earnings came in bad, but better than many feared:
- Revenue slid 12% year over year to $11.1 billion—a bit higher than the anticipated $10.7 billion, albeit the steepest drop in five years.
- Earnings per share of $0.14 also surpassed projections of $0.13, although that’s still a far cry from a year ago, when it hovered at $1.01.
Meanwhile, costs from tariffs are expected to approach $1 billion as the company scrambles to pivot its supply chain away from China: Nike currently imports 16% of its footwear from the country, but wants to get that down to high-single digits by the end of fiscal 2026.
The good news is that CEO Elliott Hill—who came out of retirement last October to help revive the long-suffering brand—said that this quarter bore the brunt of the company’s turnaround plans and marked the bottom. “It can only go up from here,” Hill quipped on the earnings call. Shareholders can only pray that those aren’t famous last words.
How Nike’s bouncing back
Despite its many problems, Nike is still the world’s biggest sneaker company. But it’s been giving up market share to brands like Decker’s Hoka and On Holding, which were all too glad to fulfill the footwear needs of Macy’s and DSW after Nike’s former CEO John Donahoe cut ties with those retailers in an ill-fated attempt to sell shoes directly to consumers.
Making sense of market moves
Stay up to date on the latest market news with daily analysis of the investing landscape, served up Brew-style.
Now, Nike is attempting to mend fences with wholesalers and forge relationships with new outlets like Amazon. To start fresh, the company slashed prices on its lineup to clear out stale old inventory and make room for new styles. Hill pulled back on lifestyle categories (think Air Force 1, Dunks, and a delayed collaboration with Kim Kardashian’s Skims) in favor of funnelling energy toward core sports performance products.
So far, so good: The new Vomero 18 running shoes, which come with extra cushioning designed to recreate the sensation of running on an anti-gravity treadmill, has been dubbed a winner in terms of comfort. Nike also garnered points with female customers by sponsoring elite Kenyan runner Faith Kipyegon during her quest to become the first woman to break the four-minute mile, and while she didn’t succeed, it was darn close at 4:06.42, and still a world record.
What Wall Street is saying: Given the company’s been in sorry shape for a while now, investors were desperate for any glimmer of a comeback, and this earnings report delivered, triggering a whirlwind of upgrades from brokers raising their price targets. Jefferies analyst Randal Konik probably put it best: “As competitive pressures ease, execution improves, and with easier comps ahead, we see a V-shaped recovery in F27 and continue to Just Buy It!”
Although signs suggest Nike is getting back on track, Hill noted that a “full recovery will take time.” But that’s OK—it’s a marathon, not a sprint.—JD