Nike set to beat earnings, fall short on guidance, Morgan Stanley says

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Nike set to beat earnings, fall short on guidance, Morgan Stanley says

) is expected to report slight earnings beat for its fiscal second quarter of 2025, driven by cost controls. But the company’s revenue to remain under pressure, amid challenges in sales and profit margins.

Analysts at Morgan Stanley expect the company to post earnings per share of $0.67, slightly above the Street's $0.65 estimate, but on weaker revenue and lower gross margins. The company's North American sales and global direct-to-consumer credit card transactions are in decline. Demand in China remains weak, and the sportswear giant faces excess inventory issues, leading to heavier-than-anticipated promotions. These factors have driven Morgan Stanley’s sales forecast down by 10% year-over-year, compared to the Street’s estimate of a 9% decline.

Nike’s management faces pressure to navigate declining revenue and profit margins, with long-term growth hinging on its ability to manage inventory, reinvigorate sales, and control promotional activity. While the new CEO brings some hope, analysts remain cautious about the company’s near-term outlook.

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