Nike (NKE) Earnings: Have Turnaround Efforts Turned into Results Yet?

Nike (NKE) will report earnings this afternoon, as the beleaguered footwear and athletic apparel company’s recent turnaround efforts have resulted in a recovery from its post-tariff news shock lows but have yet to materialize into a lasting uptrend. 

For this quarter, analysts are looking for $0.37 earnings-per-share against last year’s figure of $0.78, a stark -52.5% decline. Meanwhile, revenue expectations are for $12.14B vs. year-over-year sales of $12.35B (-1.7%). The options market for this week’s Dec. 19 expiration shows heightened volatility, with a potential expected move of about +/- 4.60 (7%).

CEO Elliott Hill has focused on his ‘Win Now’ strategy, which aims to reinvigorate the iconic company by refocusing its marketing on athletics, clearing out old inventory, and refreshing wholesale partnerships. 

However, shares remain down about -20% from their 52-week highs of 82.44. Analysts have not made many price target changes recently, but BTIG reiterated its buy rating and its $100 price target last week, while Guggenheim initiated coverage at a buy with a $77 price target. 

The chart shows a recent upside breakout from a downward-sloping trendline that began with the post-gap down highs just below 77 on Oct. 2. However, this rally never quite filled the gap that formed at 77.12 and shares saw a decline shortly after.

Now, despite the upside breakout, price has also not surpassed its relative highs near 70 from late October. This 70 level stands out as short-term resistance, with the previous highs around 66 showing a similar supportive area.

Price yesterday seemed to stabilize near the 21-day Exponential Moving Average, which came in around 65.46 as of yesterday’s close, but also breached the longer-term 63-EMA which was around 66.58.

The yearly volume profile study shows the heaviest trading activity near 62, which is the Point of Control. On the way there, price will have to pass through a smaller node near 65, and things pick up again to the upside around 72 to 74.

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