Nike Q4 earnings out after the bell: What will sales tell us?

Nike (NKE) will be reporting fiscal fourth-quarter earnings results after the closing bell on Thursday. How scared are Nike investors of a spending slowdown by consumers? The activewear stock is down nearly 12% year-to-date in 2024.

Yahoo Finance Markets Reporter Josh Schafer breaks down Wall Street's sales numbers estimates Nike will try to live up to, labeling Nike as another brand that is "protecting [sales], but not being able to really reignite sales."

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Luke Carberry Mogan.

Video transcript

Let's also talk Nike here on the day, ticker symbol, Nke down fractionally right now.

It's expected to report fiscal fourth quarter results after the bell on Thursday.

Investors are focused on how consumers are holding up amid fears of a spending slowdown while Wall Street tries to figure out when the company's turnaround plans will fully pay off for more on what to expect.

We've got our very own, Josh Schafer, he's watching all things, the swoosh here.

All right.

So what's going on with them?

Yeah, Brad Nike has really been a story of slowing revenue growth, a revenue growth that is still increasing but growing by less and less when you look compared to the year prior.

And so the large question here is just when are they going to be able to return to higher sales growth?

Right.

Nike had been a company that grew at a very high sales growth rate for a long time and then it sort of swimmed.

And so they've done a good job from Wall Street's perspective of sort of protecting their margins in this perspective.

They're expected to have margins increase again in the fourth quarter.

That's gonna be reported after Bell today, eps expected to come in at 85 cents.

That's up from 66 cents last year.

So from a profitability standpoint Wall Street isn't too disappointed.

The larger story here is again, back to sales and when they're gonna be able to improve that, I know you guys were just talking to Kevin Gordon over at Schwab.

That's a theme we're seeing across the market right now is really some companies just sort of protecting but not necessarily being able to reignite sales.

And Nike is one example of that in the stock, quite frankly, has shown that you look at shares of Nike over the last year down about 17.5%.

The S and P 500 is up 25% in that time frame.

It's been a clear under performer.

And so it seems like one of the key things people are looking for out of this is a, the guidance for 2025 because this is the end of 2024 and b within that guidance, what new products is Nike gonna come out with to sort of fight back against some of these competitors.

I think we all know the competitors and at this point, a lot of us are win wearing them.

And how is Nike going?

I'm not currently wearing, I saw, I saw Sean to look at my shoes.

I'm not wearing Nikes and I'm not wearing hoka, but they've had a lot of competition right from, from companies like HOA and how does Nike sort of respond to that and come out with new products that are gonna be able to sort of excite people again?

Like Brad he's wearing today.

I got new balances today.

I got some Nikes over there.

You're a Nike guy.

You're a Nike guy.

I wore probably like four different brands over the course of the day shoe wise.

But do you feel like a lot of the Nike stuff you're buying is remakes of old shoes rather than them coming out with new products?

Uh It definitely is, but certain collaborations I would say so they did a collaboration with like East Side Golf for instance, and that was one that I I bought into because yeah, it's a great story behind some of the collaborations and, and I kind of wrote down four points on this not to cut off your hit here because it's been going amazing.

But one of the huge things that I'm thinking about going into this Ernest uh period in this news call here, I wrote down four things.

China number one, that's gonna be massive, figuring out where they're continuing to be able to build out the business in that region.

Number two, the Olympics here, this is gonna be a massive period where Nike is gonna go full speed ahead.

Despite the fact that you've got Ralph Lauren putting people in space like jumpsuits to try and figure out.

Ok.

Exactly.

And some of the prep your gear too, uh, for the opening ceremonies and whatnot.

They've been doing that for years.

We'll see if that works for Ralph Lauren.

But for Nike it's gonna be coming down to the performance and, and demand generation, you can only have the Jordan application of everything for so long before that strategy starts to get old.

That's what they talked about.

Last quarter, I've bought into some of the Jordan brand golf shoes.

It's been great.

You're comfortable out there and you look like you can play basketball.

That's awesome too.

And then it's the innovation here, the collaborations, they got the Nike and Hyper Ice collaboration that was just announced too.

And so where do you see this company start to lean back into the company as a tech platform as well here as much, which is, you know, that's gonna get poked at by analysts perhaps.

Um I think for a lot of people knowing Hyper Ice and what that brings to your recovery as an athlete uh that could work as a strategy here going forward.

I think also the question though for Nike is just the brand strength right now in terms of winning back some of the customers that they have lost to some of their competitors out there.

So yes, analysts are have been along saying that the lack of innovation has been a huge issue.

There's reason though to be optimistic maybe about the products that are going to come online here as you look ahead to 2025.

But you also got a question about whether or not some of those who used to shop at Nike now are no longer going there because they've gotten used to the fact that they haven't come out with anything new, but it's, it's a retail company.

We can use a little anecdata, right?

You walk down New York City, you see more people wearing on shoes and more people wearing hookah than you see wearing Nike walking shoes or Nike running shoes.

Right.

How do you kind of get that market?

How do you become cool in the walk around shoe?

Because I agree with what Brad was saying about Jordan's like Jordan still have that, that cool factor to him.

Right.

And it's more of a style play.

They're, to me they're not really in that lifestyle style play where people are walking around with them and they find the comfort and the coolness within that I did get the Deion Sanders retros that they re-released.

And, uh, I feel faster.

I'm not faster though, but prime time, prime time, baby.