Nike late Thursday reported a 12% quarterly sales decrease, but it’s what’s next that has many Wall Street traders excited.
The sportswear giant has been in a rare and sustained slump, reporting five consecutive quarters of decreased sales, but some analysts think first-year CEO Elliott Hill is finally getting the company back on track.
On Friday, Nike’s stock jumped 15%, with several stock analysts encouraging investors to buy shares.
On a percentage basis, it was the third-best performance in Nike’s more than 11,000 trading days as a public company, according to research from the Portland investment firm Ferguson Wellman. In 2025 trading, though, shares remain down 4%.
The earnings report “wasn’t as bad as feared, and there’s finally hope that the worst is behind them,” analyst Tom Nikic, of Needham & Co., said in a research note.
Under previous CEO John Donahoe, Nike focused on retro sneakers and selling products through its own stores, website and mobile apps.
Hill, who started work in October, reversed those decisions, causing a significant amount of short-term financial pain as the company worked through old inventory, developed new products and started selling again at places like Urban Outfitters.
Hill also rebuilt his management team. On a call with stock analysts yesterday, he said he’s replaced 11 of his 15 direct reports.
Many analysts are convinced Hill is on his way to ending the sales rut.
“It continues to be clear that necessary steps are being taken to reestablish Nike’s position in the marketplace, and it will take some time,” veteran analyst Sam Poser, of Williams Trading, said in a research note.
While analysts struck a hopeful tone, there’s still some rough water ahead.
In an internal email yesterday, Hill told Nike employees some layoffs are likely coming as the company shifts internally to organize around sports. It previously sorted workers among men’s, women’s and kids’ lines — a structure that looked more like a fashion company than a sportswear company.
Nike will also need to contend with what Matt Friend, the company’s chief financial officer, estimates will be a $1 billion tab from sweeping new tariffs. On yesterday’s earnings call with stock analysts, Friend said he expects Nike can “fully mitigate” the cost over time, including by moving more manufacturing out of China, which is subject to the highest new tariffs.
“Overall, Nike is making the right moves by cleaning up inventory, rebalancing the product portfolio by increasing newness and reducing the focus on classic franchises, and strengthening relationships with wholesale partners, but the brand is still a few quarters away from reaching stabilization,” analyst Dana Telsey, of Telsey Advisory Group, said in a note to investors.
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