NIKE, Inc. stock is taking a hard hit on December 19, 2025, with investors focusing less on the fact that Nike beat quarterly expectations and more on the uncomfortable parts of the story: shrinking profitability, intensifying tariff-driven costs, and a China business that still looks stuck in reverse.
As of the latest trade, Nike shares (NYSE: NKE) were around $58.89, down about 10% on the day, after opening near $59 and trading as low as roughly $57.82.
That move follows Nike’s fiscal second-quarter 2026 results (period ending Nov. 30, 2025) and management commentary that framed the company’s turnaround as still being in the “middle innings”—a phrase that is beginning to wear thin with a market that wants measurable milestones, not metaphors. [1]
What’s driving Nike stock today
The market reaction is largely a referendum on margins and visibility:
- Gross margin fell about 300 basis points to 40.6%, with Nike pointing to tariffs and other cost pressures. [2]
- Nike signaled that pressure isn’t over, forecasting another margin decline in the current quarter. [3]
- Greater China revenues fell for the sixth straight quarter, and Nike executives openly acknowledged the need to reset their approach in the region. [4]
In other words: the numbers were “fine,” the trajectory is what spooked people.
Nike earnings recap: the key numbers from fiscal Q2 2026
Nike reported $12.43 billion in revenue, up about 1%, and diluted EPS of $0.53, with net income down 32% year over year to about $0.8 billion. [5]
A closer look shows a company actively reshaping its channel mix:
- Wholesale revenue:$7.5B, up 8% [6]
- Nike Direct revenue:$4.6B, down 8% (Nike Brand Digital down 14%, Nike-owned stores down 3%) [7]
- Converse revenue:$300M, down 30% [8]
- Inventories:$7.7B, down 3% (Nike cited unit declines, partially offset by higher product costs tied to tariffs) [9]
Regionally, the split shows why the market is so obsessed with China:
- North America: about $5.633B, up 9% [10]
- Europe, Middle East & Africa: about $3.392B, up modestly [11]
- Greater China: about $1.423B, down 17% [12]
- Asia Pacific & Latin America: about $1.667B, down around 4% [13]
Nike also increased “demand creation” (marketing) spend to $1.3B, up 13%, signaling the company is leaning into brand heat and sports marketing even while profitability is being squeezed. [14]
Why Nike shares fell even though Nike beat estimates
Two things can be true at once: Nike can beat Wall Street’s quarterly EPS expectations and still disappoint investors on the forward view.
1) Margins are compressing—and tariffs are the scary part
Nike’s gross margin decline is now a central narrative. Reuters reported Nike expects U.S. tariffs tied to Southeast Asian manufacturing to cost the company $1.5 billion this year, with management calling tariffs a “significant headwind.” [15]
Nike’s own earnings release also tied the margin decline largely to higher tariffs in North America. [16]
2) The holiday quarter outlook didn’t calm nerves
Nike said it expects fiscal Q3 revenue to be down in the low-single digits, which is softer than what many analysts had been modeling for the key holiday period. [17]
On profitability, Nike guided that Q3 gross margin will be down roughly 175–225 basis points, keeping margin worries front and center. [18]
Notably, Nike also said (via an earnings call transcript) that excluding the impact of new tariffs, underlying margin dynamics would look better—implying tariffs are doing a lot of the damage. [19]
China is still the swing factor for Nike’s turnaround
If you’re trying to explain today’s Nike stock move in one word, it’s probably: China.
Reuters reported:
- China accounts for roughly 15% of Nike’s annual revenue, yet footwear sales in China dropped 21% in the quarter. [20]
- Nike’s China digital sales fell 36%, a brutal number in a market where online momentum is often the quickest route back to growth. [21]
- CEO Elliott Hill said Nike needs to “reset” its approach to China, while executives avoided giving a precise timeline for recovery. [22]
The competitive context matters too. Reuters pointed to growing pressure from domestic brands such as Anta and Li-Ning, plus the reality that Nike is fighting for relevance in a consumer environment described as intensely promotional and price-sensitive. [23]
Investopedia echoed the concern, noting that Nike’s CFO warned China may continue to struggle for the rest of the fiscal year and that investors appear uneasy about how long this turnaround may take—especially in Greater China. [24]
Bright spots: Nike isn’t standing still
Even in the cautious coverage, there are clear positives that help explain why many analysts haven’t abandoned the stock:
- Nike management has emphasized a strategy pivot toward core sports categories (such as running and football/soccer) and rebuilding relationships with wholesale partners—moves meant to restore distribution strength and brand energy. [25]
- Reuters noted new product lines like NikeSKIMS (Nike’s partnership with Kim Kardashian’s brand) have shown promise, even as Jordan and Converse are described as needing work. [26]
- Inventories declined year over year, which suggests Nike’s cleanup efforts are progressing—though the tradeoff is often heavier promotions and lower margins in the short term. [27]
This is the market’s dilemma: the turnaround plan has credible building blocks, but the near-term financial “cost of fixing” the business is showing up loudly in margins and guidance. [28]
Nike stock forecast: what analysts changed on December 19, 2025
Today’s analyst response has been less about panic downgrades and more about a re-pricing of the timeline.
Several firms trimmed price targets while keeping ratings that suggest they still believe Nike can recover—just not quickly:
- Bank of America (BofA): cut price target to $73 from $84, maintained Buy, citing China challenges and store/inventory issues; it also estimated China could represent only ~13% of fiscal 2026 sales. [29]
- Piper Sandler: cut price target to $75 from $84, maintained Overweight, pointing to mixed regional performance and a China recovery that “will take time.” [30]
- Bernstein SocGen: cut price target to $85 from $90, maintained Outperform, describing a likely “slow grind” rather than a quick bounce-back. [31]
- Needham: cut price target to $68 from $78, maintained Buy, reflecting concern over how long the turnaround may take. [32]
At the more optimistic end of the spectrum, Barron’s reported that a Jefferies analyst urged investors to “Just BUY It,” keeping a $110 price target (even as other firms reduced targets). [33]
Where the Street stands overall
Consensus targets vary depending on the data provider and timing, but Business Insider showed a wide forecast range, with a median target around $87.30 (high estimate about $125, low about $53) among a large set of analysts. [34]
The gap between today’s price (~$59) and those targets explains why Nike can fall sharply and still remain “buy-rated” in many models: the Street is effectively saying the downside is near-term execution risk, not permanent brand impairment—though that assumption is exactly what China performance is testing.
What matters next for NIKE, Inc. stock
From today’s news flow and analyst commentary, the next few catalysts look fairly clear:
- China stabilization: Investors will want signs that Nike’s “reset” is working—especially in digital and footwear, where the declines are steep. [35]
- Tariff mitigation: Nike is staring at a major cost headwind, and the market will watch for pricing, sourcing, or mix strategies that offset it. [36]
- Margin inflection: Nike’s Q3 margin guide implies continued pressure; the question is whether FY2026 can show a credible path back toward stronger profitability. [37]
- Channel execution: Wholesale is growing while Nike Direct is shrinking; investors will want evidence this is a strategic recalibration, not a loss of momentum. [38]
Bottom line
Nike stock’s sharp drop on December 19, 2025 is a classic market verdict: a beat is nice, but confidence is better. Nike delivered resilience in North America and showed progress in parts of the business, but China weakness, tariff-driven cost pressure, and a cautious outlook combined into a message investors didn’t want to hear heading into the holiday quarter. [39]
Wall Street’s forecasts (so far) suggest many analysts still see upside—yet today’s price target cuts also make it clear that the “Nike turnaround” is increasingly being priced as a multi-year project, not a quick fix. [40]
References
1. www.reuters.com, 2. investors.nike.com, 3. www.reuters.com, 4. www.reuters.com, 5. investors.nike.com, 6. investors.nike.com, 7. investors.nike.com, 8. investors.nike.com, 9. investors.nike.com, 10. investors.nike.com, 11. investors.nike.com, 12. investors.nike.com, 13. investors.nike.com, 14. investors.nike.com, 15. www.reuters.com, 16. investors.nike.com, 17. www.reuters.com, 18. www.investing.com, 19. www.investing.com, 20. www.reuters.com, 21. www.reuters.com, 22. www.reuters.com, 23. www.reuters.com, 24. www.investopedia.com, 25. www.reuters.com, 26. www.reuters.com, 27. investors.nike.com, 28. www.reuters.com, 29. uk.investing.com, 30. www.investing.com, 31. uk.investing.com, 32. www.barrons.com, 33. www.barrons.com, 34. markets.businessinsider.com, 35. www.reuters.com, 36. www.reuters.com, 37. www.investing.com, 38. investors.nike.com, 39. investors.nike.com, 40. uk.investing.com
