Nike Stock Continues Decline, Market Outlook Worrisome
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
0mins
Source: Fool
- Performance Decline: Nike's revenue increased only 1% year-over-year in Q2 of fiscal 2026, while direct-to-consumer sales fell 8%, indicating weakness in its core business that could impact future profitability.
- China Market Challenges: Revenue in Greater China dropped 17% year-over-year, significantly worse than the 9% decline in Q1, suggesting that Nike is losing market share to competitors like Lululemon, which is experiencing strong growth in the region.
- Margin Pressure: Although wholesale revenue rose 8%, Nike's gross margin decreased by 300 basis points in Q2 due to weak direct sales and higher tariffs in North America, leading to a 32% year-over-year decline in net income, reflecting significant pressure on profitability.
- Cautious Future Outlook: Nike expects Q3 revenue to decline year-over-year, with gross margins contracting between 175 and 225 basis points, as management emphasizes ongoing structural and transitional challenges, indicating a long road to recovery ahead.
Analyst Views on NKE
Wall Street analysts forecast NKE stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NKE is 76.11 USD with a low forecast of 62.00 USD and a high forecast of 110.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
21 Analyst Rating
14 Buy
7 Hold
0 Sell
Moderate Buy
Current: 64.990
Low
62.00
Averages
76.11
High
110.00
Current: 64.990
Low
62.00
Averages
76.11
High
110.00
About NKE
NIKE, Inc. is engaged in the designing, marketing and distributing of athletic footwear, apparel, equipment and accessories and services for sports and fitness activities. The Company's operating segments include North America; Europe, Middle East & Africa (EMEA); Greater China; and Asia Pacific & Latin America (APLA). It sells a line of equipment and accessories under the NIKE Brand name, including bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment and other equipment designed for sports activities. It also designs products specifically for the Jordan Brand and Converse. The Jordan Brand designs, distributes and licenses athletic and casual footwear, apparel and accessories predominantly focused on basketball performance and culture using the Jumpman trademark. The Company also designs, distributes and licenses casual sneakers, apparel and accessories under the Chuck Taylor, All Star, One Star, Star Chevron and Jack Purcell trademarks.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
