Nike Shares Fall 14% After Q2 Earnings Report, Prompting Number of Downgrades

Nike (NYSE:NKE) announced its second-quarter earnings on Thursday, surpassing earnings estimates but falling short on revenue and margins, signaling potential challenges for the sportswear company. Following the announcement, Nike shares dropped more than 14% in pre-market today.

The company reported an EPS of $1.01 on revenue of $12.61 billion. Analysts had expected EPS of $0.84 on revenue of $12.86 billion. Inventory levels decreased by 11% to $7.52 billion from the previous year, which was below the projected $7.99 billion.

Nike's gross margin rose by 130 basis points to 44.7%, but still fell short of the expected 45.3%.

Looking forward, Nike acknowledged that its Q4 performance highlighted challenges, prompting an update to its fiscal 2025 outlook. Following the announcement, several Wall Street analysts downgraded their rating on Nike, including Raymond James, JPMorgan, UBS, Stifel, and Morgan Stanley.