Nike Stock Jumps After Q4 Earnings Beat Despite China Weakness

Nike (NYSE:NKE) reported stronger-than-expected fiscal Q4 results, lifting its stock 7% in after-hours trading as investors responded positively to upbeat guidance and signs that the worst of its turnaround impact may be over.

The athletic apparel giant posted earnings per share of $0.14 on revenue of $11.1 billion, beating analyst forecasts of $0.12 EPS on $10.7 billion in revenue. However, total revenue declined 12% year-over-year, with a steep 21% drop in China sales weighing heavily on overall performance.

In North America, sales dropped 11% to $4.7 billion, though the decline was less severe than analysts feared. Nike’s gross margin contracted 440 basis points to 40.3%, reflecting higher promotional activity and unfavorable channel mix shifts as the company implements its ongoing “Win Now” restructuring plan.

Despite the top-line contraction, Nike executives expressed confidence in the recovery trajectory. CEO John Donahoe said during the earnings call that the company expects business conditions to improve going forward. CFO Matthew Friend reinforced this sentiment, stating that the financial drag from turnaround efforts likely peaked in Q4.

“The fourth quarter reflected the largest financial impact from our Win Now actions, and we expect the headwinds to moderate from here,” Friend said.

Nike continues to navigate challenges in key markets like China while working to streamline operations and regain growth momentum. The better-than-expected earnings suggest early signs of progress, giving investors hope for a stronger fiscal year ahead.

With positive forward-looking statements and a narrowing gap between actual and expected performance, Nike’s Q4 results may signal a turning point for the brand amid an evolving global retail landscape.