MW Nike says its effort to focus on athletes' needs is paying off, and the stock is rallying

By Bill Peters

Confidence in the stock 'hinges on innovation,' BofA analysts say

Shares of Nike Inc. moved higher after hours on Thursday after the sneaker maker reported fiscal third-quarter results that beat Wall Street's estimates, as the company tries to focus more deeply on the needs of athletes.

Nike $(NKE)$ said fiscal third-quarter sales fell 9% year over year to $11.27 billion, topping analysts' forecasts for $11.02 billion, with GAAP earnings per share of 54 cents, above Wall Street's estimate for 28 cents.

"The operating environment is dynamic, but what matters most for [Nike] is serving athletes with new product innovation and re-igniting brand momentum through sport," Chief Financial Officer Matthew Friend said in a statement.

Shares were up 3.8% after hours.

Still, as of the close of trading, Nike's stock had fallen nearly 30% over the past 12 months. A higher cost of living and stiffer competition have weighed on demand for its sneakers. Nike has tried to sell off unwanted lifestyle sneakers, and its new chief executive, Elliott Hill, has said he wants the company to respond more precisely to the needs of athletes.

Last month, Nike said it would collaborate with Kim Kardashian's Skims clothing brand to launch a new line of fitness gear this spring, in an effort to attract more women customers. But some observers have said that Nike has tended to prioritize men over women, and have noted that celebrity collaborations don't always work.

Ahead of the results, Raymond James analysts, in a research note on Tuesday, said demand was likely still weak, as consumers and markets reckon with inflation and President Donald Trump's tariffs. The economic backdrop in China, they said, "remains challenging."

BofA analysts, in a research note on Tuesday, said confidence in the stock "hinges on innovation."

"On the earnings call, we don't expect to hear a major revelation on product, but we will listen for early product wins, whether it's in running with the Vomero 18 or Pegasus Premium, or basketball," they said.

"Signs of product wins will be the singular most important catalyst to re-engage investors on the stock, in our view," they continued.

-Bill Peters

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March 20, 2025 16:35 ET (20:35 GMT)

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