Nike Stock Falls to 5-Year Low as Global Sales Decline
The Nike stock fell 5% in afterhours trading, to $68.10, as sales declined in China and North America, and Q4 expectations were negative too.
Revenue Struggles Despite Beating Earnings Expectations
Nike, one of the world’s largest sportswear brands, released its fiscal third-quarter earnings report on March 20, 2025, revealing the company’s continued struggles amid a challenging economic landscape. Analysts had anticipated a decline in revenue, citing ongoing supply chain disruptions, weakened consumer demand, and broader macroeconomic pressures as key factors.
Despite these challenges, Nike’s total revenue came in at $11.27 billion, slightly exceeding Wall Street expectations of $11.01 billion. However, this figure marked a 9.3% year-over-year drop, significantly lower than the $12.4 billion reported in the same quarter last year. The company did manage to outperform earnings per share (EPS) forecasts, reporting 54 cents per share, well above the 29-cent estimate—a small positive in an otherwise difficult quarter.
Nike Stock Reaction – Will Open Lower Today
Following the earnings release, Nike stock initially spiked in after-hours trading, driven by the earnings beat. However, as concerns over declining revenue and shrinking gross margins weighed on investors, the stock quickly reversed, falling 5% in afternoon trading to close at $68.10. Management’s cautious outlook for the upcoming quarter further dampened investor sentiment.
Key Challenges Facing Nike
During the earnings call, Nike executives acknowledged ongoing challenges across key markets. Revenue in China declined 17%, reflecting slower economic recovery and reduced consumer spending, while North America saw weaker discretionary spending, further pressuring overall sales.
Additionally, Nike pointed to higher markdowns, inventory-clearing efforts, and unfavorable channel mix as primary reasons behind the decline in gross margins. These issues signal potential difficulties in maintaining profitability in the near term.
What’s Next for Nike?
With these obstacles ahead, newly appointed CEO Elliott Hill faces significant pressure to stabilize Nike’s operations and drive a strategic turnaround. The company will need to focus on improving sales efficiency, optimizing inventory management, and boosting global consumer demand to regain investor confidence.
As market conditions remain uncertain, Nike’s ability to navigate these headwinds will determine whether the stock can recover or if further declines are on the horizon. Investors will be watching closely in the coming quarters for signs of stabilization and renewed growth.
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