Nike Stock Slips 3.5% After Earnings Beat as Tariff Boost Masks Weak Demand
Nike earnings: Nike beats Q4 estimates, but tariff refund, weak China sales, and cautious guidance keep NKE under pressure near $40.
Quick overview
- Nike reported fourth-quarter revenue of $11.0 billion and EPS of $0.72, beating estimates but driven by one-time tariff benefits.
- Investors remain concerned about weak demand in China, a decline in Nike Direct revenue, and cautious guidance for future quarters.
- North America showed some growth, with a 3% increase in revenue, but overall challenges persist in the sportswear and lifestyle categories.
- Technical analysis indicates that Nike's stock is trading below major moving averages, with critical support at $40 and resistance levels above $41.
Nike (NKE) beat fourth-quarter revenue and EPS estimates, but after-hours selling showed investors remain focused on weak China demand, softer guidance, and a fragile turnaround.
Nike Beat Estimates, But Investors Found the Catch
Nike Inc. (NYSE: NKE) delivered a headline earnings beat, but the market reaction remained cautious. Shares closed regular trading at $41.05, down 1.04%, before falling another 2.47% after hours to $40.04.
The decline shows that investors looked beyond the top-line beat and focused instead on the quality of earnings, weak China trends, and management’s warning that the turnaround remains uneven.
Tariff Refund Drives the Profit Beat
Nike reported fiscal fourth-quarter revenue of $11.0 billion, down 1% on a reported basis and down 4% currency-neutral. That still beat analyst expectations around $10.86 billion.
The stronger surprise came from earnings. Nike posted diluted EPS of $0.72, far above estimates near $0.12-$0.13. However, the company said EPS included a $0.52 benefit tied to the expected recovery of IEEPA tariffs.
Gross margin rose 890 basis points to 49.2%, but that also included an approximately 900-basis-point boost from the same tariff recovery, worth $986 million.
That is the key issue. Nike’s reported numbers looked much stronger, but investors are treating part of the beat as a one-time benefit rather than a clean operating recovery.
China and Nike Direct Still Pressure the Turnaround
The underlying business remains challenged.
Nike Brand revenue was flat on a reported basis but down 3% currency-neutral. Wholesale revenue rose 4% to $6.6 billion, helped by renewed efforts to rebuild retailer relationships. But Nike Direct revenue fell 7% to $4.1 billion, including a 12% drop in Nike Brand Digital.
Greater China remains the biggest problem. Reuters reported China sales fell 17% on a constant-currency basis in the quarter, worsening from a 10% decline in the previous period. Nike is still dealing with weak assortments, discounting pressure, and competition from domestic brands such as Anta and Li Ning.
CEO Elliott Hill acknowledged the recovery is not yet where management wants it to be, saying the results are “not there yet.” The company also expects revenue to decline through the first half of fiscal 2027, keeping pressure on the stock.
North America and World Cup Demand Offer Some Support
There were bright spots.
North America revenue rose 3%, and wholesale growth suggests Nike’s attempt to repair relationships with retail partners is beginning to show some results. The company is also leaning heavily into sports marketing around the World Cup, with management pointing to improving demand in football products.
Nike is also planning more than a dozen footwear launches as it tries to shift momentum back toward performance categories such as running, basketball, training, and football.
Still, investors want clearer evidence that new products can offset ongoing weakness in sportswear and Jordan lifestyle categories, which remain important parts of the business.
NKE Technical Analysis: 4-Hour Chart Still Bearish Near $40
From a technical perspective, Nike’s 4-hour chart remains weak after the earnings reaction.
The stock is trading below every major moving average listed on the 4-hour setup.
- The first resistance zone sits at the 10 SMA of $41.27, Hull Moving Average of $41.39, and 10 EMA of $41.58.
- After the after-hours move to $40.04, Nike needs to reclaim this $41.27-$41.58 band quickly to stabilize sentiment.
- Above that, resistance builds at the VWMA of $42.25, 20 EMA of $42.33, and 20 SMA of $42.77.
- The Ichimoku base line at $43.16 and 30 SMA at $43.47 add another barrier.
NKE Chart 4H – Earnings Beat Fades as $40 Support Comes Back Into Focus
The larger resistance structure remains higher. The 50 EMA is at $43.38, while the 100 EMA is at $44.90. The 200 EMA and 200 SMA sit at $49.04 and $49.51, keeping the $49-$50 area as the major longer-term recovery target.
Oscillators are mostly neutral but still soft. RSI is at 34.83, close to oversold territory but not yet a confirmed reversal signal. Stochastic %K is at 24.37, and Williams %R is at -79.02, showing pressure remains heavy. Momentum is flashing a buy signal at -1.37, but MACD remains negative at -0.90 with a sell signal.
Is it a Good Time to Buy Nike Stock After the Earnings?
The most important level now is $40. If NKE breaks below that zone after earnings, sellers could push the stock toward fresh multi-year lows.
On the upside, buyers first need to reclaim $41.27-$41.58. A stronger recovery would require a move above $42.25-$43.16. Until then, rallies may continue to face selling pressure.
For now, Nike’s earnings beat is not enough to change the story. The company is making progress in wholesale and performance products, but tariff benefits, weak China sales, and cautious guidance keep the stock vulnerable near $40.
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