NIKE, Inc. (NYSE: NKE) stock ended the week under heavy pressure, closing at $58.71 after a -10.54% slide in the latest session, as investors weighed an earnings beat against worsening margin headwinds and another sharp downturn in Greater China. [1]
The selloff follows Nike’s fiscal 2026 second-quarter report (quarter ended Nov. 30, 2025), where the company posted $12.4 billion in revenue and $0.53 in diluted EPS—but also disclosed a steep profitability squeeze and pointed to more near-term margin pressure ahead. [2]
Below is a full, publication-ready breakdown of the latest Nike stock news (Dec. 20, 2025), including earnings takeaways, guidance, China and tariff impacts, and the fresh wave of analyst forecasts and price-target changes driving sentiment into year-end.
What happened to Nike stock this week
Nike shares sank after investors focused less on the headline earnings beat and more on three issues that now dominate the NKE narrative:
- Margins fell sharply and management expects additional near-term pressure.
- Greater China remains the biggest weak spot, with a multi-quarter decline continuing.
- Tariffs and channel rebalancing are hitting profitability during the turnaround.
Reuters reported that Nike expects gross margins to fall another 175 to 225 basis points in the current quarter, and that fiscal Q3 revenue is expected to be down in the low-single digits—a cautious stance for the period that includes the December holiday shopping season. [3]
Nike earnings recap: the key numbers investors are pricing in
Nike’s official earnings release for fiscal Q2 2026 shows a company still generating massive revenue—but fighting a margin battle while reshaping its business model. [4]
Top-line and profitability highlights (Fiscal Q2 2026)
- Revenue:$12.427B (up ~1% reported) [5]
- Gross margin:40.6% (down 300 bps) [6]
- Net income:$792M (down 32%) [7]
- Diluted EPS:$0.53 (down 32%) [8]
Channel and brand mix
- Wholesale revenue:$7.5B (up 8%) [9]
- NIKE Direct revenue:$4.6B (down 8%)
- Nike Brand Digital down 14%
- NIKE-owned stores down 3% [10]
- Converse revenue:$300M (down 30%) [11]
Balance sheet items that matter right now
Shareholder returns
Nike highlighted 24 consecutive years of increasing dividend payouts and said it returned about $598M to shareholders through dividends in the quarter. [14]
Guidance: what Nike is signaling for the holiday quarter
For Nike stock, the next-quarter outlook has become the central debate—because it tells investors whether the turnaround pain is peaking or still building.
Reuters reported two key guideposts from Nike’s commentary:
- Revenue for fiscal Q3 is expected to be down in the low-single digits. [15]
- Gross margins are expected to decline 175–225 basis points in the current quarter. [16]
That combination—down sales, down margins—is the kind of setup that can keep pressure on a consumer brand stock even after an EPS beat, particularly when the market wants clarity on when the reset stops costing earnings power. [17]
China: the pressure point that Nike says it must “reset”
If there’s one region investors are watching more closely than any other for Nike stock, it’s China.
Reuters described Nike’s China problem as deepening, with:
- Six straight quarters of sales declines in China [18]
- Footwear sales down 21% in China in the quarter [19]
- China representing roughly 15% of Nike’s annual revenue [20]
- Online sales down 36% amid tougher competition and weaker demand [21]
Nike’s CEO said the company needs to reset its approach to the China marketplace, while Reuters also pointed to intensifying competitive pressure from large domestic players including Anta and Li-Ning. [22]
For investors, this matters because Nike historically relied on China not just for growth—but for premium pricing, brand heat, and a strong direct-to-consumer engine. When China turns promotional and traffic weakens, the margin model can break quickly. [23]
Tariffs and the margin story: why the turnaround is squeezing profits
Nike’s margin compression isn’t being blamed on a single factor; it’s a stack of headwinds arriving at once.
1) Tariffs are a direct profitability headwind
Reuters reported Nike’s CFO reiterated that U.S. tariffs affecting key Southeast Asian sourcing countries are expected to cost Nike about $1.5 billion this year. [24]
Nike’s earnings release also explicitly tied the 300 bps gross margin decline to higher tariffs in North America. [25]
2) The channel mix is changing—fast
Nike is leaning harder into wholesale partners (wholesale up 8%) while NIKE Direct declined 8%. [26]
Reuters noted that wholesale tends to come with lower pricing than direct-to-consumer, and that Nike has used heavy discounting to clear older inventory—both of which can pressure margins during a reset. [27]
3) The turnaround is not linear
Nike’s CEO framed the effort as “middle innings” of a comeback, while Reuters quoted market observers emphasizing that the turnaround is “costing real money.” [28]
Wall Street reaction: price targets are getting cut, but “Buy” ratings largely hold
By Dec. 20, 2025, the analyst story around Nike stock looks like this:
- Many firms cut price targets (a recognition that the recovery timeline may be longer).
- Many still kept Buy/Overweight ratings (a belief that Nike’s brand and scale can eventually re-expand margins).
Notable target changes and rating calls (post-earnings)
- Bank of America (BofA): Cut target to $73 from $84; Buy maintained (China concerns highlighted). [29]
- Truist: Cut target to $70 from $85; Buy maintained (elevated China/Converse headwinds). [30]
- Piper Sandler: Cut target to $75 from $84; maintained Overweight stance in its note. [31]
- Stifel: Cut target to $65 from $68; Hold maintained. [32]
- Jefferies: Reiterated Buy and kept a $115 target, pointing to innovation progress even while acknowledging China remains challenged. [33]
- Multiple firms summarized by Benzinga: Telsey (to $72), Needham (to $68), Piper (to $75), BofA (to $73), Bernstein (to $85), generally maintaining prior ratings. [34]
What the broader consensus looks like (Dec. 20 snapshot)
- MarketBeat lists Nike as “Moderate Buy” with an average 12‑month price target of $78.14 (wide range: $62 low to $115 high). [35]
- TipRanks’ weekend summary similarly describes a “Moderate Buy” consensus even after the sharp selloff, while emphasizing that investors are spooked by margin pressure and China weakness. [36]
Nike stock forecasts: where analysts see revenue and EPS heading next
Beyond price targets, investors are watching whether Nike’s earnings power can rebound as the inventory cleanup, channel reset, and product refresh move forward.
StockAnalysis’ compiled forecasts (as shown on Dec. 20) indicate:
- Revenue (FY 2026):$47.20B (about +1.92%)
- Revenue (FY 2027):$49.64B (about +5.19%)
- EPS (FY 2026):$1.68 (about -22.13%)
- EPS (FY 2027):$2.53 (about +50.43%) [37]
Those projections tell a clear story: Nike’s near-term is being modeled as a margin trough, with analysts expecting a stronger EPS rebound the following year—assuming Nike can stabilize China, reduce discounting, and regain mix and pricing power. [38]
Dec. 20 analysis: the “bearish profitability” debate is now front and center
One of the clearest themes in Dec. 20 commentary is that Nike’s margin problem is no longer viewed as a quick fix.
A Simply Wall St analysis published Dec. 20 frames Nike’s setup as stable sales but squeezed margins, pointing to a much lower trailing net margin and arguing that the valuation premium requires meaningful earnings growth to justify it. [39]
Whether investors agree with that framing or not, the core point matches what the market priced in on the selloff: Nike stock is trading on confidence in a multi-year margin recovery, not just quarterly revenue resilience. [40]
Institutional and insider signals: what filings showed on Dec. 20
Another thread in the Dec. 20 news cycle: positioning.
MarketBeat reported that Voya Investment Management LLC increased its Nike stake by 25% in the third quarter, adding 351,842 shares to reach 1,761,086 shares held. The same piece also summarized mixed insider activity in prior filings (including a director purchase and a chairman sale). [41]
This doesn’t “call the bottom” by itself—but it adds context: even with the drawdown, Nike remains widely held by major institutions, and some are adding exposure as the turnaround unfolds. [42]
What to watch next for Nike stock
As of Dec. 20, the next major drivers for NKE share performance are straightforward—and tightly connected to the same issues that triggered the selloff:
- Holiday-quarter execution (fiscal Q3): investors will watch whether “low-single-digit” revenue decline holds and whether margins track within the expected 175–225 bps decline range. [43]
- China strategy reset: any evidence of improving traffic, healthier digital trends, or reduced promotional intensity would matter disproportionately. [44]
- Tariff math: Nike has explicitly flagged about $1.5B in tariff costs, and the market will monitor how much pricing, sourcing, and mix can offset it. [45]
- DTC stabilization vs. wholesale reliance: Nike Direct declines versus wholesale growth are telling investors how much profitability Nike is trading away for near-term volume and cleaner inventory. [46]
- Brand heat and product cadence: Nike has pointed to newness and sport-focused offense, while Reuters noted newer initiatives (including NikeSKIMS) alongside areas that still need work (Jordan, Converse). [47]
Bottom line for Dec. 20, 2025: Nike stock is cheap on price, not yet cheap on certainty
Nike stock’s drop to the high-$50s has reopened the valuation debate—especially with many analysts still carrying price targets well above the current quote and maintaining broadly positive ratings. [48]
But the market’s message is equally clear: until Nike shows a credible path to margin recovery—especially in China—earnings beats may not be enough. Guidance for lower sales and another margin step-down in the holiday quarter is exactly the kind of signal that keeps investors cautious, even with Nike’s brand power and long-term recovery ambitions. [49]
References
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