Nike (NKE) earnings Q2 2025

Nike posted better-than-expected results on Thursday under new CEO Elliott Hill, who said the company was taking “immediate action” to turn around the business and return it to growth.

While expectations for the company were low before the release, the sneaker giant significantly exceeded Wall Street’s expectations in terms of sales and profits.

Here’s how Nike performed in the second fiscal quarter of 2025 compared to Wall Street expectations, based on an LSEG analyst survey:

• Earnings per share: 78 cents versus 63 cents expected
• Revenue: $12.35 billion versus $12.13 billion

Shares rose about 8% in extended trading.

Nike’s reported net income for the three-month period ended Nov. 30 fell to $1.16 billion, or 78 cents per share, compared with $1.58 billion, or $1.03 per share, a year earlier.

Revenue fell to $12.35 billion, down about 8% from $13.39 billion a year ago.

“After an exciting 60 days of being reunited with my NIKE teammates, our clear priority is to put sport back at the heart of everything we do,” Hill said in a press release. “Our team is ready to go and I am confident you will experience more moments where NIKE is NIKE again.”

Hill, who started at Nike as an intern in the 1980s before leaving the company in 2020, is tasked with turning around the world’s largest sportswear company after it fell behind on innovation, ceded market share to rivals and lost its ownership botched sales strategy.

The company is already in the midst of adjusting its product range and has implemented significant markdowns to clear inventory. Under former CEO John Donahoe, the company grew on the back of three major franchises – Air Force 1s, Dunks and Air Jordan 1s – but now the shoes have become so commonplace that they’ve lost their cool factor.

Nike is therefore trying to reduce supply, which it says will have an impact on sales in the short term, but hopefully not in the long term.

Last quarter, Nike Store and online sales fell 13%, while wholesale sales fell 3%. Heavy discounting contributed to a 1 percentage point decline in gross margin, which came in at 43.6%, slightly better than the 43.3% expected by StreetAccount analysts.

Inventory, another area of ​​concern, was flat year-over-year at $8 billion. Unit volumes increased, but this was offset by lower product input costs and a shift in product mix.

Converse, which Nike acquired in 2003, also weighed on the company’s overall performance. Revenue fell 17% to $429 million in the period, well below the $462.6 million that analysts polled by StreetAccount had expected.

Nike’s move away from Dunks and Air Force 1s, as well as deep discounts, have also had an impact Foot Lockerwhich missed Wall Street’s sales and profit estimates in its third-quarter report on Dec. 4, due in part to weak demand for Nike products, its CEO Mary Dillon told CNBC at the time.

Foot Locker’s dismal quarter was a warning sign for Nike and an indication that investors may need to be patient as they wait for the sneaker giant to get its business back on track.

Hill has been in the new role for just over two months and still has a lot of work to do beyond fixing Nike’s product lineup. He must boost Nike’s innovation pipeline, revamp relationships with wholesalers and improve morale after a series of layoffs and a breakdown in company culture.

He has had a number of victories since taking office. The National Football League announced Dec. 11 that it had extended its contract with Nike after briefly courting other bidders. Amid criticism that it has fallen behind on innovation and botched the release of a uniform for Major League Baseball, the NFL’s decision to extend its contract with Nike through 2038 was a major vote of confidence.

Now Nike is the exclusive provider of jerseys for the NFL, MLB and the National Basketball Association.

Shares of Nike are down about 27% in 2024 as of Wednesday afternoon, compared with a rise of about 27% for the S&P 500.