27 June 2025
If you are covering Nike’s latest financial results, please find below a comment from Mamta Valechha, consumer discretionary analyst at Quilter Cheviot:
“Nike continues to slump, with its fourth quarter the worst in at least two decades. Sales were down 12%, while its operating margin was a meagre 2.9%. The sales themselves had actually come in ahead of really low expectations, producing an earnings beat.
“These troubling numbers, though, suggest that Nike may nearly be at rock bottom. The share price rallied strongly in after market trading as investors are beginning to expect a positive rate of change going forward. It has been a difficult period for Nike following the pandemic, and the threat of tariffs simply is not helping the situation for the company.
“It will be a slow recovery, however. Management is expecting further sales declines and record low operating margins for Q1. That said, it is setting itself a low bar, hoping to give itself room for manoeuvre and the ability to beat expectations from investors and begin to drive positive momentum back into the business. Having a cleaner inventory and lower discounting will help, but ultimately Nike needs to produce new products that people want to buy, bringing about increased demand to help bring sales back to the company. The green shoots of recovery beginning to show themselves in some division, but more could soon be on the way.”
