Nike stock dashes 8% lower on withdrawal of 2025 fiscal guidance
- Nike stock sinks as much as 8% on Wednesday.
- NKE shares sell off after footwear maker misses revenue estimate.
- Already bad 2025 fiscal guidance gets withdrawn.
- Traders search for support for NKE to stablize, could come at $80 or $71.
Nike (NKE) stock got flayed by the market on Wednesday following its post-market earnings release late Tuesday. NKE shares traded as much as 8% lower in the morning session.
Traders were already pessimistic about the athletic brand heading into fiscal Q1 2025 earnings, which is the result for the quarter ending in August, even before management retracted its fiscal 2025 guidance.
Management blamed the retraction on the need to provide its new CEO, Elliot Hill, with a clean slate. Nike’s pullback hurt its index, the Dow Jones Industrial Average (DJIA), early on, but the DJIA gained slightly after lunch.
Nike stock news
Nike earnings fell from $0.94 in the quarter a year ago to $0.70 in the quarter ending in August. However, that was a full 18 cents better than Wall Street had expected. Gross margin rose by 120 basis points to 45.4%.
Revenue of $11.6 billion missed consensus by $50 million. Direct revenue fell 13% YoY, while wholesale revenue dropped 8% YoY.
Overall footwear sales fell 11.4% YoY, while apparel dropped a similar 10.5%. Equipment sales rose 13.6% YoY.
The real rub came from management withdrawing its previous fiscal 2025 guidance. That guidance had called for a high single-digit downturn in sales during the first half of the fiscal year. Then Nike had previously said that the full fiscal year would see a middle single-digit pullback in sales due to better results toward the end of the period.
“Given our CEO transition and with three quarters left in the fiscal year, we are withdrawing our full year guidance,” said Chief Financial Officer Matthew Friend. “We intend to provide quarterly guidance for the balance of the fiscal year. This provides Elliott [Hill] with the flexibility to reconnect with our employees and teams, evaluate the current strategies and business trends, and develop our plans to best position the business for fiscal '26 and beyond.”
Nike returned $1.8 billion to investors during the quarter via share buybacks and dividends, and the Oregon-based company has $10.3 billion in cash on its balance sheet.
Nike stock forecast
Nike stock pulled back from its recent overtaking of the $89 former support level. With Wednesday's pullback, not even the 100-day Simple Moving Average (SMA) provided support. Now the market will look to the 200-day SMA near $80.
If that level doesn't hold, then the $71 support from this summer will return to focus.
NKE daily stock chart
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Author
Clay Webster
FXStreet
Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.
