Shares of Nike (NYSE: NKE) skyrocketed more than 18% in intraday trading Friday following a better-than-expected fiscal fourth-quarter earnings report, with investors cheering signs that the company’s costly restructuring efforts may finally be paying off.
The sportswear giant reported Q4 revenue of $11.10 billion, a 12% drop compared to the same period last year but still ahead of Wall Street’s forecasts. Analysts had feared steeper declines, particularly in North America, where sales fell 11% to $4.7 billion—a softer hit than many predicted. Nike’s core running category showed signs of stabilization, offering hope for a rebound.
Adjusted earnings per share came in at $0.14, beating estimates of $0.12. CEO John Donahoe struck an optimistic tone during the earnings call, stating, “We’re seeing green shoots in key categories, and our turnaround strategy is gaining traction.” His confidence was echoed by CFO Matt Friend, who noted that Q4 likely marked the “peak of financial pressure” from Nike’s restructuring plan, suggesting smoother growth ahead.
In a strategic shift, Nike also revealed plans to reduce reliance on Chinese manufacturing, moving more production to the U.S. to counter potential tariff hikes. Looking forward, the company expects Q1 revenue to decline by mid-single digits—a more optimistic outlook than the 7.3% drop analysts had projected.
CWEB Business News Analysis & Opinion:
Nike’s strong earnings beat, and upbeat guidance suggest the worst of its recent struggles may be over. The company’s focus on innovation, supply chain adjustments, and cost discipline appears to be restoring investor confidence. However, challenges remain, including stiff competition from brands like Adidas and upstart direct-to-consumer rivals. If Nike can sustain momentum in its running and lifestyle segments while navigating macroeconomic pressures, this rally could have stayed power.
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