NIKE (NKE) Stock Forecast & Price Target

Nike's second-quarter operating expenses experienced a modest year-over-year increase of approximately 1%, primarily attributed to a 13% rise in Demand Creation costs, reflecting a strategic investment in brand and sports marketing. The company reported a significant growth in footwear revenue, particularly in North America where sales surged by 31% on a constant currency basis, contributing to a notable overall revenue increase of $1.4 billion. Additionally, the positive momentum in Nike's sales growth, coupled with improvements in operating overhead and a strong wholesale performance, signals a favorable outlook for future profitability and market position.

Nike's management reported a significant year-over-year decline of over 20%, translating to approximately $550 million in revenues for the second quarter, alongside guidance for a low single-digit percentage decline in third-quarter revenues, falling short of market expectations. Key financial pressures include a contraction in North America margins by around 410 basis points year-over-year, and further declines in other regions, notably an 850 basis point drop in Greater China due to increased markdowns and sales-related returns. This backdrop, coupled with a consistent loss in footwear market share and intensifying competition across its core categories, raises concerns about revenue sustainability and margin pressures moving forward.