Nike’s (NKE) troubles seem far from over as it gears up for Q3 earnings

Nike, Inc. (NYSE: NKE) is expected to report third-quarter results on March 20, after the close of regular trading. The sneaker giant has adopted a strategy focused on aggressive sports marketing and innovations centered on its sports-led portfolio. While those efforts are expected to drive a turnaround, it may take some time before the company regains its former glory.

Nike’s stock has yet to fully recover from the selloff it suffered in mid-2024, and the downturn has extended into the current year, though there were short-lived rebounds. The stock experienced further weakness ahead of next week’s earnings, ending the last trading session close to the levels seen at the beginning of the year. That is below its 52-week average value of $82.25. However, considering the company’s brand power and growth initiatives under the new leadership, NKE appears to be an attractive long-term investment.

Q3 Earnings on Tap

When Nike reports its third-quarter results on March 20, at 4:15 pm ET, Wall Street will be looking for earnings of $0.27 per share on revenues of $11.01 billion. That suggests a deterioration from the prior-year quarter when the company earned $0.77 per share and generated revenues of $12.43 billion.

In the second quarter of 2025, Nike returned approximately $1.6 billion to shareholders in the form of dividends and through share repurchases. It ended the quarter with cash and short-term investments of $9.8 billion. Total revenues decreased 8% annually to $12.4 billion in the November quarter.

Under Elliott Hill, a long-term Nike veteran who took the helm as the new CEO a few months ago, the company realigned its priorities to overcome the recent sales slump, and a key strategy is to return to its sports roots. The initiative is significant since the company is facing increased competition from others like Adidas and Puma as well as newer more innovative players. Nike has often faced criticism for its decision to pull back from certain long-standing retail partners like Footlocker and to excessively focus on direct-to-customer sales. Additionally, the company is experiencing a sales slowdown in China, one of the largest markets outside the U.S.

In the second-quarter earnings call, Elliott Hill said, “Moving forward, we will lead with sport and put the athlete at the center of every decision. The sharpness in each sport is what differentiates our brand and our business, and fuels our culture. Another observation is that the reliance on a handful of sportswear silhouettes is not who we are. We will get back to leveraging deep athlete insights to accelerate innovation, design, product creation, and storytelling. Sport is what authenticates our brand.”

Sales Dip

Sales of footwear and apparel, which together account for more than 90% of Nike’s total revenues, declined in Q2, partially offset by an increase in equipment sales. Demand declined across all geographical regions. Consequently, net income decreased by double digits to $1.2 billion or $0.78 per share. Meanwhile, both revenues and the bottom line exceeded expectations, marking their second consecutive beat.

NKE’s performance has been lackluster so far this week. The stock was trading lower on Thursday afternoon, after opening the session at $73.58.