economy
After a soft Nike quarter, we have a big decision to make on the stock
The results are unlikely to improve Nike's standing in the portfolio
TL;DR
- Nike's Q4 FY2026 revenue of $10.97 billion and EPS of 20 cents beat analyst expectations.
- Despite beating forecasts, Nike shares fell in after-hours trading, continuing a year-to-date decline.
- The company's turnaround strategy is taking longer than expected, with challenges in China and product innovation.
- Management is focusing on improving gross margins through reduced promotions and better inventory management.
- Regional sales in North America fell short of expectations, and China continued to see significant declines.
- Nike Direct revenue declined, while wholesale revenue saw modest growth.
- Converse sales also experienced a significant year-over-year drop.
- Management reiterated expectations for flattish year-over-year earnings for the next three quarters.
- The investment club is re-evaluating its position in Nike, considering better opportunities elsewhere.