Shares of athletic apparel maker Nike (NKE) soared in after-hours trading after the company reported earnings for its second quarter of Fiscal Year 2025. Earnings per share came in at $0.78, which beat analysts’ consensus estimate of $0.63. However, sales decreased by -7.9% year-over-year, with revenue hitting $12.35 billion. Still, this beat analysts’ expectations of $12.11 billion.
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Furthermore, NIKE Direct revenues fell 13% to $5 billion, while NIKE Brand Digital sales decreased 21%, on a reported basis. Interestingly, investors could have anticipated this drop in revenue by simply looking at Nike’s website traffic. As the image below shows, the number of visitors dropped during the most recent quarter. In fact, total estimated visits slipped by 17.14% when compared to the same quarter of last year.
Shareholder Returns
In the second quarter, the company returned approximately $1.6 billion to shareholders, driven by $557 million in dividends, a 7% increase from the previous year, and $1.1 billion in share repurchases. The buybacks retired 13.1 million shares as part of the company’s four-year, $18 billion repurchase program approved in June 2022. As of November 30, 2024, the company has repurchased a total of 112.8 million shares under the program for a total of approximately $11.3 billion.
Is NIKE Stock a Buy, Sell, or Hold?
Although Nike didn’t provide guidance, we can turn to Wall Street to see what analysts expect. Currently, they have a Moderate Buy consensus rating on NKE stock based on 16 Buys, 14 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 35% decline in its share price over the past year, the average NKE price target of $89.96 per share implies 16.7% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
