Nike Q4 FY2025 earnings preview: navigating challenges amid strategic shifts

​​​Nike faces challenging quarter amid strategic transition

​Nike is set to report its fiscal fourth-quarter (Q4) 2025 earnings on 26 June 2025, after market close. The company faces a complex landscape marked by shifting consumer preferences, intensified competition, and macroeconomic pressures.

​The timing of these results comes at a critical juncture for Nike as it attempts to navigate multiple headwinds while implementing significant strategic changes under CEO Elliott Hill's leadership.

​The upcoming earnings report will provide crucial insights into whether Nike's strategic initiatives are beginning to gain traction or whether the company faces more persistent fundamental challenges in its core markets.

​Revenue decline expected to exceed analyst projections

​Nike has guided for a mid-teens percentage decline in Q4 revenue, suggesting a drop of approximately 13%-15%, in line with analysts' expectations of an 14.93% decrease to $10.72 billion. This projection follows a 9.33% year-over-year revenue decline in third-quarter (Q3) FY2025, with notable decreases in both Nike Direct (down 12%) and Wholesale (down 7%) segments.

​The magnitude of the expected revenue decline indicates that Nike's challenges may be more severe than initially anticipated, with weakness evident across both its direct-to-consumer and wholesale distribution channels.

​The decline in Nike Direct sales is particularly concerning as this channel has historically provided higher margins and better customer data, making it central to the company's long-term digital transformation strategy.

​Wholesale segment weakness suggests that retail partners are also experiencing reduced demand for Nike products, indicating that the challenges extend beyond the company's own direct sales operations.

​Margin pressure from tariffs and competitive dynamics

​The company also anticipates a significant contraction in gross margins, estimating a decline of 400 to 500 basis points, influenced by increased tariffs on imports from China and Mexico.

​This substantial margin compression reflects the dual impact of higher input costs from tariffs and competitive pressures that limit Nike's ability to pass through these cost increases to consumers through price increases.

​The tariff impact highlights Nike's continued reliance on Asian manufacturing, making the company vulnerable to trade policy changes that can quickly erode profitability even when demand remains stable.

​The magnitude of margin pressure suggests that Nike may need to absorb significant cost increases rather than risk further demand destruction through price rises in an already challenging consumer environment.

​"Win Now" strategy targets product revitalisation

​Under CEO Elliott Hill, Nike is executing its "Win Now" strategy, focusing on revitalising its product lineup and strengthening its presence in key markets. This includes reducing reliance on classic styles like Air Force 1s and Dunks, which have seen heavy discounting, and emphasising innovation in performance-oriented products.

​This strategic shift represents a significant departure from Nike's recent approach, which had relied heavily on retro and lifestyle products that commanded premium pricing but may have become oversaturated in the market.

​The move toward performance-oriented innovation aligns with Nike's historical strengths in athletic technology and could help differentiate the brand from competitors that focus primarily on fashion and lifestyle positioning.

​However, the success of this strategy will depend on Nike's ability to deliver compelling new products that resonate with consumers and justify premium pricing in a competitive marketplace.

​Stock performance reflects investor concerns

​Nike's stock has declined by around 19% year-to-date, reflecting investor concerns over the company's near-term performance and strategic direction.

​The significant share price decline suggests that investors have lost confidence in Nike's ability to navigate current challenges and return to sustainable growth, creating pressure on management to demonstrate progress.

​This valuation pressure may create opportunities for investors who believe Nike's strategic shifts will eventually prove successful, though timing remains uncertain given the multiple headwinds facing the company.

​Analysts emphasise the importance of forthcoming earnings guidance and the market's reception to Nike's new product offerings in determining the stock's trajectory.

​Nike has a TipRanks Smart Score of ‘4 Neutral’ but is rated as a ‘buy’ with 13 ’buy’ and 12 ‘hold’ recommendations (as of 25/06/2025).

Nike TipRanks Smart Score chart

​According to LSEG Data & Analytics, 6 analysts have a ‘strong buy’ recommendation for Nike, 13 a ‘buy’, 20 a ‘hold’ and 2 a ‘sell’ with a long-term mean price target at $71.14, 16% above the current share price (as of 25/06/2025).

Nike LSEG Data & Analytics chart

​Nike technical analysis

​The Nike share price has been sideways trading since the 12 May and is currently bouncing off its lower boundary and Monday’s $59.19 low. While this level holds on a daily chart closing basis, a retest of the February-to-June downtrend line at $62.97 may be on the cards.

​Were it and the $64.85 current June 3-month high to be exceeded, the 200-day simple moving average (SMA) at $71.96 may be reached.

​Nike daily candlestick chart 

​A fall through and daily chart close below Monday’s $59.19 low may lead to the April low at $52.28 being revisited, however.  

​Competitive landscape intensifies pressure

​Nike faces intensified competition from rivals including Adidas, which has been gaining market share in key categories, and newer entrants like On Running and Hoka that have captured consumer attention with innovative products.

​The competitive pressure is particularly acute in the lifestyle and casual segments where Nike has traditionally commanded premium pricing, with consumers showing increased willingness to experiment with alternative brands.

​This competitive dynamic forces Nike to balance investment in innovation with price competitiveness, creating additional challenges for maintaining margins while funding the R&D necessary for product differentiation.

​The success of Nike's "Win Now" strategy will partly depend on whether the company can re-establish clear competitive advantages in performance categories where brand loyalty may be stronger than in lifestyle segments.

​Investment considerations for Nike shares

​For investors considering Nike ahead of the Q4 earnings announcement, the company presents a complex risk-reward proposition during a period of strategic transition.

1. Research Nike's competitive positioning, strategic initiatives, and market dynamics in athletic footwear and apparel to understand the investment opportunity.
2. ​Consider how consumer spending trends, competitive pressures, and trade policies might affect Nike's recovery prospects.
3. ​Open an account with IG by visiting our website and completing the application process.
4. ​Search for 'Nike Inc' or its ticker 'NKE' on our trading platform or app.
5. ​Implement appropriate risk management given the potential volatility around earnings announcements and ongoing strategic uncertainty.

​Spread betting and CFD trading provide flexible approaches for trading Nike, allowing positions on both rising and falling prices as the company navigates its strategic transition.

​For longer-term investors who believe in Nike's brand strength and ability to execute its strategic shift, share dealing offers direct ownership at what may prove to be attractive valuations, though patience will likely be required.

​As Nike navigates these challenges, stakeholders will closely monitor the company's ability to adapt and drive sustainable growth in a competitive and evolving market landscape.

​The upcoming earnings report will provide crucial evidence of whether the "Win Now" strategy is beginning to deliver results or whether more fundamental changes may be needed to restore the company's growth trajectory.​​