Proactive Investors - Nike Inc (NYSE:NKE, ETR:NKE)'s fiscal 2025 guidance will be the focus of its upcoming earnings call after it hands down its fourth quarter report on Thursday, June 27, after the stock market closes.
Wall Street analysts, on average, expect Nike to post earnings per share of $0.86 on revenue of $12.91 billion for 4Q.
Analysts at Bank of America (NYSE:BAC) believe the athletic apparel and footwear retailer’s outlook will be more of a focus than its earnings, with its 4Q results only an indicator of sales and margin trajectories entering the year.
They believe Nike will guide 2025 earnings per share below expectations but think investors are prepared for this, lowering their forecast to $3.82.
“We see sufficient margin levers in the near-term to support earnings and are beginning to hear about green shoots around innovation and the new product pipeline,” the bank’s analysts wrote.
“We don’t expect these green shoots to translate into sales growth in the first half of fiscal 2025, but building evidence of Nike’s innovation pipeline would bolster confidence in a 2H25 turnaround.”
Nike has previously guided that its 1H25 sales will be down by a low-single-digit percentage to reflect headwinds from product lifecycle management and global macro challenges, specifically in China and Europe, the analysts highlighted.
They added that Nike would face mix shift headwinds in 1H25 as it sells more to wholesale to amplify newness and reestablish strong placement within its best partners. They also expect clearance pressure as it sunsets products to make way for newness.
Offsetting these factors are lower transportation costs and product cost opportunities, the analysts noted.
“We think investors are braced for 1H sales guidance of a mid-single-digit decline and the debate centers around the steepening acceleration in 2H to achieve positive full-year sales growth,” they wrote.
The BofA analysts repeated their ‘Buy’ rating on Nike and $113 price objective. Nike shares closed at about $95 on Tuesday.