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NIKE Inc. NKE is slated to release second-quarter fiscal 2025 results on Dec. 19. The leading sports apparel retailer is estimated to have witnessed year-over-year declines in the top and bottom lines in the fiscal second quarter.

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The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $12.2 billion, suggesting a 9.1% decline from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for the company’s fiscal second-quarter earnings is pegged at 64 cents per share, indicating a decline of 37.9% from the year-ago reported number. Earnings estimates for the fiscal second quarter were unchanged in the last 30 days.

In the last reported quarter, the company delivered an earnings surprise of 34.6%. Its bottom line beat the consensus estimate by 29.5%, on average, in the trailing four quarters.

Earnings Whispers for NKE Shares

Our proven model does not conclusively predict an earnings beat for NIKE this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

NIKE has an Earnings ESP of -2.61% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Trends to Watch Before NKE’s Q2 Earnings

NIKE’s second-quarter fiscal 2025 performance is expected to have been affected by continued challenges related to lifestyle product sales, headwinds in the Greater China business, certain EMEA and other markets, and soft digital sales trends.

NIKE has been grappling with challenges primarily from sustained weak sales in its lifestyle segment, a decline in digital revenues and difficulties in the Greater China market. These issues have led to a slowdown in revenue growth and compressed profit margins. The lifestyle segment, comprising men’s, women’s and Jordan lines, has struggled, especially in the digital channel. Rising inflation and higher interest rates have dampened consumer spending on discretionary items, making shoppers more selective — a trend particularly challenging for luxury retail brands in North America.

This trend has been detrimental to other lifestyle and luxury brand retailers, and sporting goods companies in the United States, including lululemon athletica inc. LULU, Ralph Lauren Corporation RL and Crocs Inc. CROX.

Additionally, recent trends indicate significant shifts in consumer traffic in Greater China, a key market for NIKE's global strategy. Declining brick-and-mortar traffic and lower sell-through rates have contributed to regional revenue declines. While management has tempered its near-term outlook for China, it remains confident in NIKE’s long-term competitive position in the region.

NIKE, Inc. Stock Price and EPS Surprise

NIKE, Inc. price-eps-surprise | NIKE, Inc. Quote

On the last reported quarter’s earnings call, NIKE expected revenues to moderate for the forward quarters. Amid these uncertainties and following a recent CEO transition, NIKE withdrew its fiscal 2025 guidance. However, the company provided quarterly guidance for the rest of fiscal 2025. For the second quarter of fiscal 2025, NIKE expects an 8-10% revenue decline and a 150-basis-point drop in the gross margin due to heightened promotional activity, channel mix pressures and supply-chain inefficiencies. SG&A expenses are projected to be flat, with higher demand-creation costs balanced by reduced operating overhead.

However, NKE’s strategic pricing and supply-chain optimization, including logistics, inventory management and distribution, are expected to have cushioned the bottom line in the to-be-reported quarter. Effective inventory management strategies have been another critical component of NIKE's success. The company maintained a healthy inventory position at the end of first-quarter fiscal 2025. NKE’s inventory dollars were down 5% year over year in the fiscal first quarter, reflecting product mix shifts and lower product input costs. This is expected to have boosted its margins to some extent in the fiscal second quarter.

The company has also been benefiting from its Consumer Direct Acceleration strategy. The company is intensifying its focus on sports, speeding up the introduction and expansion of products and innovations. NKE has also been enhancing its storytelling efforts with greater impacts and boldness while elevating the overall marketplace to strengthen brand distinction and align with consumer preferences. These actions are expected to have aided the top and bottom lines in the fiscal second quarter.

NIKE Stock Price Performance & Valuation

NIKE’s shares have exhibited a downward trend, shedding as much as 36.2% in the past year. The stock has declined against the broader Consumer Discretionary sector and the S&P 500’s growth of 14.6% and 28.6%, respectively. The NKE stock has also underperformed the industry’s decline of 30.3% in the same period.

One-Year NKE Stock Performance