Nike Stock Surges 12% Despite 12% Revenue Drop

Nike, Inc. experienced a significant surge in its stock price on June 27, 2025, following the release of its quarterly earnings report. The company's revenue for the quarter, although down 12% year-over-year, exceeded analyst expectations, totaling $11.1 billion. This performance led to a notable 12% increase in share value, reflecting investor optimism despite the challenging economic environment.

The earnings report marked the third quarter under the leadership of CEO Elliott Hill, who had previously indicated that the company's turnaround efforts might negatively impact sales in the short term. However, Hill expressed confidence in the future, stating that the company expects its business to improve as a result of the progress made during the turnaround. CFO Matt Friend highlighted that the fourth quarter reflected the largest financial impact from the company’s turnaround efforts. He forecasted that current-quarter revenue would fall by a mid-single-digit percentage from a year earlier, indicating a significant improvement from recent double-digit declines. Friend also mentioned that the company expects to take a $1 billion hit from the Trump administration's tariffs if they remain at current levels. However, he assured investors that Nike intends to fully mitigate the impact of these headwinds over time.

Despite reporting its worst sales drop in five years, Nike's stock surged by over 10% in extended trading following the earnings call. This rally was driven by the company's better-than-expected earnings and a clearer game plan for its turnaround strategy. The stock had been down 17% for the year through Thursday’s close, reflecting the challenges faced by the company in recent months.

The earnings report also provided insights into Nike's strategic initiatives. The company is focusing on shifting its portfolio to better align with consumer demand and market trends. This includes efforts to streamline operations, reduce costs, and enhance product innovation. The turnaround plan aims to position Nike for long-term growth and sustainability in a competitive market.

Overall, Nike's fiscal fourth-quarter earnings report demonstrated the company's resilience and strategic agility in the face of economic headwinds. The better-than-expected results and the stock's positive reaction indicate investor confidence in Nike's turnaround efforts and its ability to navigate the challenges ahead. The earnings news significantly impacted Nike's market performance, boosting investor confidence and causing shares to rise during after-hours trading. Meanwhile, Nvidia also saw modest gains due to the U.S. government's new energy supply plans for AI. The standout share performance signals robust investor confidence in Nike's operational efforts. Market observers noted Nike's absence of direct executive commentary, while Nvidia maintained its typical communication pattern without executive remarks on this event. Investor reactions indicate belief in sustained growth, with the U.S. stock market remaining positive. Blockchain stocks remained mixed, and no major crypto impacts were reported in official channels.