Nike stock trades at about $45, 16% below where it was a decade ago and 44% below its 52-week high, as the company prepares to report fiscal fourth-quarter results on June 30. The report will test the turnaround led by CEO Elliott Hill, with North America showing early signs of a comeback after revenue rose 3% to about $5 billion in the fiscal third quarter, driven by an 11% jump in wholesale. Greater China revenue fell 7% to about $1.6 billion in the same period, and management guided for a roughly 20% drop in the fiscal fourth quarter, though the decline is largely self-inflicted as Nike deliberately ships less product to clear aged inventory and curb discounting. Gross margin slipped to 40.2% in the fiscal third quarter, down from about 41.5% a year earlier, dragged by higher U.S. tariffs and inventory clearance costs, but management expects margins to start expanding again in the second quarter of fiscal 2027. Despite the stock's decline, its price-to-earnings ratio remains about 30 because earnings have fallen nearly as fast, with net income dropping 35% in the fiscal third quarter, leaving the valuation dependent on a profit recovery.
Nike IncNike reports declining earnings, falling gross margins, and a 35% drop in net income, with a high P/E dependent on uncertain profit recovery.
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