Nike’s Upcoming Earnings Report: A Critical Test for the Sportswear Giant

As Nike prepares to release its second-quarter financial results, the investment community is bracing for a pivotal moment. The report, due after the U.S. market closes on Thursday, arrives amid a backdrop of divided analyst sentiment and heightened volatility expectations in the options market. Investors are left to ponder whether the announcement will validate existing concerns or provide a much-needed catalyst for the struggling shares.

Recent analyst commentary paints a picture of near-term caution tempered by pockets of long-term optimism. Several major firms have updated their ratings ahead of the earnings release.

• Maintaining a neutral stance, UBS analyst Jay Sole reiterated a "Hold" rating with a $71 price target.
• Similarly, Stifel's Peter McGoldrick also rates the stock as "Hold," setting a $68 target and anticipating only a slight beat against already lowered expectations.
• A more constructive view comes from Bernstein and Evercore ISI, both issuing "Buy" or "Outperform" ratings with long-term price targets of $90.
• Piper Sandler aligns with the bullish camp, recommending "Buy" with an $84 target.

The consensus estimates underscore the company's current challenges. Revenue for Q2 is projected to decline by approximately 1.7% to $12.2 billion. The pressure on profitability is even more pronounced, with earnings per share expected to fall by over 50% to a range of $0.37–$0.38. These figures highlight the significant margin compression and cost pressures Nike is currently navigating.

Anticipating Sharp Price Swings

The derivatives market is pricing in considerable movement following the earnings announcement. Implied volatility for options expiring on December 16 suggests a potential stock price swing of 7–8% post-release. This exceeds the average earnings-driven move of 6.8% observed over the past four quarters.

Trading activity on Tuesday signaled heightened interest, with over 132,000 options contracts changing hands—an unusually high volume. Notably, about three-quarters of these were call options. Market observers interpret this activity as an indication that some investors are positioning for a positive surprise or, at minimum, hedging against a potential sharp upward move.

Should investors sell immediately? Or is it worth buying Nike?

Despite a recent partial recovery, Nike's stock remains down significantly for the year. Shares closed yesterday at €57.22, reflecting a decline of over 20% since January and underscoring persistent skepticism about the company's near-term earnings power.

A Strategic Pivot Under Scrutiny

This quarterly report is widely seen as a key test for CEO Elliott Hill's strategic turnaround efforts. The anticipated profit drop illustrates the multifaceted pressures on Nike, including softer consumer demand in core markets, intense competitive rivalry, and the ongoing need to rebalance costs and product inventories.

Even against this weak price performance in 2025, there are signals of long-term conviction. For instance, Park National Corp OH increased its Nike position by 455.8% in the third quarter, building a holding now valued at over $16.5 million. This suggests some institutional investors view the current valuation—well below the 2021 peak—as an entry point for a potential recovery.

When the results are released, the focus will extend beyond top- and bottom-line figures. Management's commentary on inventory levels, growth in the direct-to-consumer (DTC) segment, and the anticipated timeline for revenue stabilization will be critical. Given the elevated implied volatility, clear guidance on these fronts will likely determine whether the stock solidifies its recent footing or retreats toward its annual lows.