Nike shares rise 10% premarket on smaller-than-expected Q1 revenue forecast.

Nike shares rise 10% premarket on smaller-than-expected Q1 revenue forecast.

Nike Inc. (NKE) saw its shares surge by 10% premarket on Thursday, June 19, 2025, following the company's better-than-expected fourth-quarter results and a smaller-than-expected first-quarter revenue forecast. The stock's performance reflects investor optimism about Nike's turnaround efforts and its ability to mitigate the impact of US tariffs on its operations.

Nike's fourth-quarter revenue declined by 12% to $11.10 billion, surpassing analysts' expectations of $10.72 billion. Profit fell to $0.14 per share from $0.99 per share in the year-ago quarter, but still beat the estimated $0.12 per share. The company's management highlighted its turnaround plan, which includes inventory cleanup for upcoming collections and a renewed direct-selling partnership with Amazon, as the reason for the positive results.

For the first quarter of the current fiscal year, Nike forecast revenue to fall in the mid-single digits, slightly better than analysts' expectations of a 7.3% drop. The company's chief financial officer, Matthew Friend, stated that the inventory cleanup is proceeding as planned, and Nike is on track to conclude the first half of the current fiscal year in a "healthy and clean position."

Nike is also relocating a part of its manufacturing operations out of China, where it faces a high duty on imports. The company currently imports 16% of its footwear sold in the U.S. from China and expects to reduce this to mid-single digits by the end of the current fiscal year. Friend warned that tariffs will increase Nike's costs by $1 billion this fiscal year, and the company plans to pass through some of these costs with "surgical" price increases on its products this fall.

Investors reacted positively to the news, with retail sentiment on Stocktwits inching higher to nearly the highest level possible (97/100). The stock's performance reflects investor belief that Nike has likely hit its bottom and expectations of upside from here on. Nike shares are currently trading at about one-third of their November 2021 peak and are down roughly 20% year-to-date.

References:
[1] https://seekingalpha.com/news/4463158-nike-to-reduce-china-production-as-tariffs-threaten-1-billion-cost-increase-stock-up-11
[2] https://stocktwits.com/news-articles/markets/equity/nike-sees-clear-path-to-recovery-ahead-after-q4-beat-stock-surges-after-hours/chmg0PPRRId
[3] https://www.nasdaq.com/articles/ahead-nike-nke-q4-earnings-get-ready-wall-street-estimates-key-metrics