Nike $NKE just delivered a long-awaited victory, and Wall Street took notice.
The $104B athletic apparel giant posted a double beat and soared over 15%, marking its best earnings reaction since 2021.
That rally also snapped a brutal streak of 4 consecutive negative reactions.
For months, the stock has been stuck in a downtrend, weighed down by concerns around bloated inventory, margin pressure, and lackluster growth in Greater China.
This quarter signaled a meaningful shift.
Revenue came in stronger than expected, and gross margins expanded. This is a clear sign that Nike is regaining control of its supply chain and promotional strategy.
Perhaps most importantly, the company highlighted improving demand trends across key geographies and product categories.
This wasn’t just a “less bad” quarter. It was a decisive step forward.
Management acknowledged past mistakes and laid out a clear path to profitable growth, with a renewed focus on core franchises, channel productivity, and cost discipline.
After a challenging period, Nike is starting to resemble its former self again. It's an iconic American brand operating on a global scale.
If this momentum continues, the recent rally may only be the beginning of a much larger move.
Here are the latest earnings stats for NKE 👇
*Click the image to enlarge it
Nike had a +5.14 reaction score after reporting a double beat.
The company reported revenues of $11.10B, versus the expected $10.73B, and earnings per share of $0.14, versus the expected $0.13.
Now let's dive into the data and talk about what happened with this report 👇
NKE had its best earnings reaction since 2021 🔥
Nike rallied 15.2% after this earnings report, and here's why:
The women's basketball segment grew more than 50% for the fiscal year.
Management outlined a comprehensive four-part plan to address the estimated $1B gross incremental cost from new tariffs.
In addition to the solid quarter, the management team reaffirmed its confidence in returning to double-digit operating margins over time.
Since peaking in late 2021, this has been one of the hottest messes in the S&P 500.
Coming into the report, the stock had been punished for 9 of the last 12 earnings reports, and 4 consecutively.
The fundamentals have deteriorated significantly over that time...
But this is a great American company, so it's not something we want to bet against.
Instead, this situation required years of patience.
Now we're at an inflection point.
The price is at the 2015 peak, which has turned into support on multiple occasions.
Once again, the bulls are stepping up when they need to.
We believe this marks the likely end of a prolonged bear market for one of the best businesses ever.
If NKE is above 68, the path of least resistance is sideways to higher for the foreseeable future.
Thank you for reading.
- The Beat Report Team
P.S.: Jeff Macke has been studying retail for over 30 years and is still on the cutting edge.
Every week, he shares exactly what he’s seeing in the sector, what he’s buying and selling, and what the market’s saying about the consumer.
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