Nike (NKE) stock spiraled Wednesday after the athletic apparel and footwear retailer reported mixed results for its fiscal first quarter, withdrew its full-year guidance and postponed its investor day.
Indeed, NKE fell nearly 7%, easily making it the worst Dow Jones stock of the session.
In the three months ended August 31, Nike's revenue decreased 10.4% year over year to $11.6 billion. Its earnings per share (EPS) slumped 25.5% from the year-ago period to 70 cents.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"Nike's first-quarter results largely met our expectations," said Nike Chief Financial Officer Matthew Friend in a statement. "A comeback at this scale takes time, but we see early wins – from momentum in key sports to accelerating our pace of newness and innovation."
The results were mixed compared with what analysts were expecting. Wall Street was anticipating revenue of $11.65 billion and earnings of 52 cents per share, according to Yahoo Finance.
As a result of Nike's upcoming CEO switch, with Elliott Hill replacing John Donahoe later this month, the company withdrew its full-year guidance and postponed its investor day.
"Given our CEO transition and with three quarters left in the fiscal year, we are withdrawing our full-year guidance. We intend to provide quarterly guidance for the balance of the fiscal year," Friend said on Nike's conference call. "This provides Elliott with the flexibility to reconnect with our employees and teams, evaluate the current strategies and business trends, and develop our plans to best position the business for fiscal 2026 and beyond."
Nike had previously forecast revenue to be down in the mid-single digits in its current fiscal year.
Is Nike stock a buy, sell or hold?
Nike has been running up the price charts in recent months, rallying nearly 20% from late June through the October 1 close. Still, shares remain roughly 23% lower for the year to date, including Wednesday's post-earnings plunge.
Nevertheless, most of Wall Street remains bullish on the blue chip stock. According to S&P Global Market Intelligence, the average analyst target price for NKE stock is $91.91, representing implied upside of more than 10% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm Stifel, however, has a Hold rating and a $79 price target on NKE stock.
"NIKE remains the #1 athletic brand with enviable scale advantage and a history of innovation," says Stifel analyst Jim Duffy. "Lofty market share, increasingly credible competition, and recent footwear share losses, however, are resulting in revenue declines and margin pressure. At the current multiple, we believe a return to growth and margin improvement is discounted in shares suggesting risk/reward largely in balance at current levels."
Related Content
-
Retire in Costa Rica With These Three Tax BenefitsRetirement Taxes Costa Rica may be a good place for retirement if you like the low cost of living and savings for your heirs.
-
Five Ways to Ease Caregiver StressCaregiver stress is real. Here are five techniques to protect your health and happiness while caring for a loved one.
-
Financial Strategies Borrowed From the Big Game's PlaybookLike the best football teams, you can win at financial planning by executing a strategy, making halftime adjustments and staying focused on the ultimate prize.
-
Three Ways to Plan Now for a Social Security Shortfall LaterThe outlook for Social Security is gloomy, but you can save now to protect against benefit cuts later. If the cuts don't happen, you'll still be better off.
-
Is It Too Late to Invest in Bitcoin?The price of the world's No. 1 cryptocurrency recently surpassed $100,000 for the first time. Is it too late to invest in bitcoin?
-
Extra Cash? Should You Pay Off Debt or Invest?Depending on your financial situation, you might benefit from paying off debt, investing or both. Here are some things to consider before deciding.
-
The Future of 1031 Exchanges Under Trump Looks BrightAs a real estate investor himself, President Trump appears poised to preserve the tax-deferring power of this strategy. But you still must follow the rules.
-
Gambling vs Investing: How to Tell the DifferenceIt's easy to get caught up in the excitement of placing a bet on the Big Game, but beware of letting that emotion drive your investing decisions.
-
Stock Market Today: Stocks Swing Lower as Inflation Fears RiseThe latest consumer sentiment data showed near-term inflation expectations rose to their highest level since November 2023.
-
January Jobs Report Keeps Rates on Pause: What the Experts Are SayingJobs Report Solid labor market conditions point to the Fed maintaining a cautious stance on borrowing costs.
