Nike surpassed analysts’ expectations in the fourth fiscal quarter of 2025, despite the company experiencing a significant decline in profits. Earnings per share (EPS) were $0.14, exceeding the forecast of $0.12 by approximately 16.67%. Revenue also slightly exceeded expectations at around $11.1 billion, compared to the anticipated $10.7 billion, marking an increase of about 3.74% over forecasts.
Revenue Decline and Profit Drop
Despite this positive surprise effect, total profit fell sharply compared to the previous year: from approximately $1.5 billion ($0.99 per share) in the year-ago quarter, it dropped to only about $211 million ($0.14 per share). Revenue also declined by about 12% compared to the previous year.
Strategic Initiatives and Market Reactions
Gross margins were under pressure, decreasing by around 440 basis points. Nevertheless, strategic initiatives such as new partnerships and innovative sales strategies show promising approaches for future growth.
In response to these quarterly figures, Nike’s stock rose significantly in after-hours trading – according to various sources, between approximately +1% to +10%, reflecting a positive market sentiment. The after-hours price increase signals cautiously optimistic investor confidence despite the profit decline.
Outlook for Investors
- Nike remains an attractive investment despite short-term challenges due to its strong brand positioning and innovation power.
- The positive surprise in EPS and revenue, along with the prospect of strategic growth, could offer further price potential.
- However, investors should also consider the significant decline in profit.
Overall, Nike demonstrates robust operational performance in a challenging environment with a cautiously optimistic outlook for the upcoming fiscal year.