Nike Inc. (NYSE:NKE) struck a cautious tone during its earnings conference call, pushing stock lower in premarket trading Friday as investors weighed a solid second-quarter performance against a softer near-term outlook and rising margin pressures.
Nike reported second-quarter revenue of $12.43 billion, topping estimates, while earnings per share came in at 53 cents, well above the 38-cent consensus. Nike Brand revenue edged up 1% to $12.1 billion.
Strength in wholesale helped offset ongoing channel shifts, with wholesale revenue rising 8% to $7.5 billion, while Nike Direct sales declined 8% to $4.6 billion, as the company continued to rebalance its marketplace.
Related: Nike Stock Slips Despite Q2 Earnings Beat, Outlook Expected On Conference Call
Weaker Outlook And Margin Headwinds
Guidance dominated investor focus. CFO Matt Friend said third-quarter revenue is expected to decline in the low single digits, with gross margin projected to fall by 175 to 225 basis points.
Friend also highlighted the impact of reciprocal tariffs, which are expected to create a $1.5 billion annualized headwind and pressure margins by more than 300 basis points, noting that corrective actions will take time to materialize.
China Pressures Persist, North America Improves
China remained a significant drag, with Greater China revenue down 16% and digital sales plunging 36% amid weaker demand and heavy promotions.
CEO Elliott Hill described China as “a longer road to a healthier business,” acknowledging that the recovery is progressing more slowly than anticipated. In contrast, North America showed momentum, with regional revenue up 9%.
Analyst Revisions And Stock Reaction
Following the call, analysts lowered price forecasts while maintaining ratings. Bank of America Securities’ Lorraine Hutchinson reiterated a Buy rating, cutting her forecast to $73 from $84.
Piper Sandler’s Anna Andreeva maintained an Overweight rating and reduced her forecast to $75 from $84.
Telsey Advisory Group’s Cristina Fernandez reiterated a Market Perform rating with a $72 target, down from $75, while Needham’s Tom Nikic kept a Buy rating and lowered his forecast to $68 from $78.
Nike shares closed Thursday at $65.63, slid after hours, and continued falling ahead of Friday’s open.
NKE Price Action: Nike shares were down 11.34% at $58.19 during premarket trading on Friday, according to Benzinga Pro data.
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