NIKE, Inc. stock is starting the week still digesting a bruising post-earnings selloff, with investors focused less on the fact that the company beat Wall Street’s profit expectations and more on what management signaled about margins, China, and the cost of the turnaround.
As of Dec. 22, NIKE shares (NYSE: NKE) were trading around the high-$50s, after opening higher and swinging through a wide intraday range.
That price action fits the current Nike narrative: the company isn’t “broken,” but its recovery is proving messy—especially in China—while tariffs and discounting are squeezing profitability.
What’s moving Nike stock on Dec. 22, 2025
The biggest driver of Nike stock right now is the market’s reaction to Nike’s fiscal Q2 2026 report (quarter ended Nov. 30, 2025), and what it implies for the holiday quarter and beyond.
On Friday (Dec. 19), Nike shares closed down about 11% at $58.71, according to Reuters—one of the sharpest single-day drops of the year for the stock. [1] Today’s coverage (Dec. 22) has largely been about why the selloff happened and whether the stock is finding a floor. [2]
Nike earnings recap: a revenue beat, but profitability pressure didn’t let up
Nike’s top-line result was not the disaster the bears were expecting—but the margin story remains the problem.
From Nike’s official release, NIKE, Inc. revenue was $12.4 billion (+1%), while net income fell to about $0.8 billion (down 32%) and diluted EPS was $0.53 (down 32%). [3]
Regionally, Nike’s quarter looked like two different companies:
- North America: $5.633B, +9% [4]
- Europe, Middle East & Africa (EMEA): $3.392B, +3% [5]
- Greater China: $1.423B, -17% [6]
- Asia Pacific & Latin America (APLA): $1.667B, -4% [7]
In other words: Nike is still selling well in key Western markets, but China continues to drag down the global story.
The forecast that spooked investors: weaker holiday-quarter outlook and more margin compression
The market’s harsh reaction wasn’t really about whether Nike could “beat” consensus by a few cents. It was about the outlook for the current quarter—Nike’s fiscal Q3, which includes December holiday shopping.
Reuters reported that Nike expects Q3 revenue to be down in the low-single digits, versus expectations for roughly a 1.5% decline. [8] Even more importantly, Nike said the margin squeeze isn’t over: after a 300-basis-point gross margin decline in Q2, Nike expects gross margin to fall another 175–225 basis points in the current quarter. [9]
That’s the kind of guidance that tends to reset valuation assumptions quickly—because it signals that the turnaround is still in its “pay now, maybe benefit later” phase.
China is the centerpiece risk for Nike’s turnaround thesis
If you want the single most consequential variable for Nike stock in late 2025, it’s not North American demand—it’s whether Nike can stabilize and rebuild in China.
Reuters called it a deepening “China conundrum,” noting that Nike has now logged its sixth straight quarterly sales decline in the region, with footwear down about 20% and digital sales down 36%. [10] The company has also acknowledged that it needs to reset its China strategy, but executives have been careful about offering a firm timeline for a rebound. [11]
The Financial Times also pointed to weak store traffic, unsold inventory, and underinvestment in retail locations—and reported Nike is upgrading stores in Shanghai and Beijing, while emphasizing e-commerce more heavily. [12]
Adding a more cultural lens, Business Insider argued Nike is struggling to stay “culturally relevant” with younger Chinese consumers amid strong local competitors and shifting trends, which may require deeper localization in marketing and digital engagement. [13]
Tariffs: the $1.5 billion headwind hanging over Nike’s margins
Nike’s margin problem is not just promotions. Tariffs are a material line item.
Nike CFO Matthew Friend reiterated that U.S. tariffs on Southeast Asian manufacturing hubs are expected to cost Nike about $1.5 billion this year, Reuters reported. [14]
That figure matters because Nike’s turnaround already involves actions that can pressure margins in the short term—like clearing older inventory and leaning more on wholesale partners. Tariffs add a second, external squeeze that Nike can only partially offset through pricing and sourcing strategy.
“Win Now”: Elliott Hill’s five-part turnaround plan (and what’s changed in 2025)
A major piece of Dec. 22 coverage is a closer look at CEO Elliott Hill’s operating changes as he tries to steer Nike back toward growth and cultural leadership.
Business Insider describes Hill’s “win now” plan as focused on culture, product, marketing, marketplace, and in-person presence—with a push to put sport and athletes back at the center of decisions. [15] It also highlights operational moves investors care about:
- Leadership reshuffle: Nike eliminated the CTO and CCO roles, created a Chief Operating Officer role, and named Venkatesh Alagirisamy as COO (effective Dec. 8), while regional GMs now report directly to Hill. [16]
- Wholesale relationships thawing: Nike has been rebuilding ties with partners after years of heavy DTC emphasis—Business Insider notes Nike is back on Amazon and has struck additional partnerships. [17]
- Promotions dialed back: Hill has talked openly about Nike becoming “too promotional” and moving toward fewer discounts, plus “surgical” price increases to offset tariff pressure. [18]
- Running strength: Business Insider cites Nike’s running business growing 20%+ in the quarter ended November (and the prior comparable period), making it one of the bright spots in the recovery effort. [19]
Reuters has also emphasized Nike’s renewed focus on core sports like running and soccer and noted Nike’s partnerships (including with SKIMS), as the company tries to regain market share from newer brands such as On and Hoka. [20]
Wall Street forecasts and analyst moves: targets cut, but no consensus “capitulation”
The analyst community is not speaking with one voice right now—because Nike is basically a two-sided bet:
- Bulls see a premium global brand with a long runway once China stabilizes, inventories normalize, and innovation/marketing re-accelerate.
- Bears see a structurally tougher competitive environment, with tariffs and China weakness making the recovery slower and less profitable than the market once assumed.
A UBS note summarized by Investing.com cut its price target to $62 from $71 (Neutral), saying Nike’s turnaround is taking longer and inventory right-sizing needs more time. UBS also argued Nike’s valuation still implies a strong recovery and sketched a long-term path back to mid-single-digit growth and roughly 10% EBIT margins (with a far-out EPS view for FY2031). [21]
Meanwhile, Investopedia reported that Bank of America stayed bullish with a buy rating but cut its price target to $73, reflecting concerns about the pace of progress—especially in China. [22] Barron’s also noted a mix of reactions, including at least one high price target from a bullish shop alongside other target reductions. [23]
The takeaway: forecast dispersion is high—a classic hallmark of a turnaround stock.
Options market signals: traders pile into downside hedges
One of the more interesting “today” datapoints isn’t a headline—it’s positioning.
Both GuruFocus and TheFly (via TipRanks) flagged that Nike saw a major increase in options activity, including roughly 41,000 newly opened January 2026 $60 put options. [24]
That doesn’t automatically mean “smart money is short.” Big put activity can reflect hedging by long holders, speculative bearish bets, or structured trades. But it does underline a key market truth: volatility expectations around Nike remain elevated after earnings.
Key metrics to watch next for Nike stock
Nike’s next few months are likely to be judged on a small set of repeatable signals—less about hype, more about whether fundamentals are bending in the right direction:
- Gross margin trend: After the Q2 decline and the guided Q3 decline, investors will want evidence that margin pressure is peaking. [25]
- Greater China stabilization: Even “less bad” results could matter if they suggest Nike is finding product/marketing fit again. [26]
- Inventory and discount cadence: Nike is balancing cleanup (which can mean discounting) against protecting brand premium positioning. [27]
- Tariff mitigation: Nike can’t control tariffs, but investors will track how pricing, sourcing, and mix changes soften the impact. [28]
- Marketing ROI: Reuters reported marketing spend is expected to top $5B in 2026 (per LSEG data), and the market will want proof that spend translates into demand, not just higher costs. [29]
Bottom line: Nike stock is acting like a classic high-profile turnaround
As of Dec. 22, 2025, Nike stock is trying to find stability after a sharp repricing. The company delivered a modest revenue beat, but investors are grappling with a more complicated reality: Nike’s recovery is real in some places (North America, parts of running), but slow and expensive in others (China), while tariffs add extra friction to margins. [30]
For now, Nike’s stock story is less “Just Do It” and more “Just… execute.” The next quarter or two will likely determine whether this move down becomes a durable base—or just the next step in a longer reset.
References
1. www.reuters.com, 2. www.forbes.com, 3. investors.nike.com, 4. investors.nike.com, 5. investors.nike.com, 6. investors.nike.com, 7. investors.nike.com, 8. www.reuters.com, 9. www.reuters.com, 10. www.reuters.com, 11. www.reuters.com, 12. www.ft.com, 13. www.businessinsider.com, 14. www.reuters.com, 15. www.businessinsider.com, 16. www.businessinsider.com, 17. www.businessinsider.com, 18. www.businessinsider.com, 19. www.businessinsider.com, 20. www.reuters.com, 21. www.investing.com, 22. www.investopedia.com, 23. www.barrons.com, 24. www.gurufocus.com, 25. www.reuters.com, 26. www.reuters.com, 27. www.investing.com, 28. www.reuters.com, 29. www.reuters.com, 30. www.reuters.com
