NIKE (NKE) Stock Forecast & Price Target

Nike's financial outlook is bolstered by a modest sales growth forecast for FY27, alongside expected improvements in gross margins and a significant upswing in earnings per share as management's turnaround strategies progress. The company's North America segment has demonstrated resilience, achieving a 9% growth and marking two consecutive quarters of improvement following previous declines. Additionally, strong performance in key footwear categories, particularly running which has seen over 20% growth for two quarters, underscores Nike's ability to drive demand and maintain brand strength globally.

Nike has experienced a significant decline in its financial performance, with management reporting a more than 20% year-over-year decrease in revenue for the second quarter, translating to approximately $550 million. The outlook for the third quarter remains weak, as management anticipates a revenue decline of low single digits, falling short of market expectations, amid heightened competition and recent losses in footwear market share. Additionally, gross margins have contracted across all major regions, with North America experiencing a 410 basis point decline, further indicating increased pressure on profitability due to tariffs, promotional activities, and inventory clean-up efforts.