Nike Earnings Preview: Brand Strength Only Goes So Far

Nike Earnings Key Points 

• Nike is set to report quarterly earnings on March 31st after the market closes 
• NKE stock is trading well under tariff lows of April 2025 and Covid lows of 2020 – the lowest stock price since 2017 
• Nike is expected to report an earnings-per-share of $0.31 on $11.25 billion in revenue 
• The EPS estimate is about a 45% decline year-over-year, and investors will want answers 

Nike Sales in North America – The Lone Bright Spot? 

Since the stock price high of $179.10 in 2021, Nike has been in a five-year boxing bout with the market – NKE stock is now on the ropes after sliding to an annual low of $51.20, a price we haven’t seen since 2017. Now, the stock market seems to be demanding answers with a +-7.5% stock price move implied for this week. The numbers aren’t projecting to be great, as the consensus earnings-per-share (EPS) comes in around $0.31 on $11.25 billion in revenue. This is a marked reduction year-over-year (about 45%), with the lone bright spot being the strength of the Nike brand in North America. Nike reported a 9% increase in sales last quarter for the ever-important region for the company. 

Last quarter, Elliott Hill, President & CEO, NIKE, Inc., offered some positivity: 

“NIKE is in the middle innings of our comeback. We are making progress in the areas we prioritized first and remain confident in the actions we're taking to drive the long-term growth and profitability of our brands...Fiscal 26 continues to be a year of taking action through Win Now, including realigning our teams, strengthening partner relationships, rebalancing our portfolio, and winning on the ground. We're finding our rhythm in our new sport offense and setting ourselves up for the next phase of athlete-centered innovation in an elevated and integrated marketplace.” 

Matthew Friend, Executive Vice President & Chief Financial Officer, NIKE, Inc., echoed similar sentiment: 

“In the second quarter, we demonstrated the resilience of our portfolio, delivering modest top-line reported growth while managing headwinds from repositioning our business in a dynamic operating environment...We are making the shifts required to position our portfolio for a full recovery and driving real-time decisions in service of the long-term health of our brands.” 

In the previous earnings report, increased tariffs were cited multiple times. Traders & Investors will want to hear more about the plan if we’re expected to see the stock price rise from near decade lows. 

Nike Earnings Implied Volatility: Big Price Range Expected 

We can always lean on the options market to give us more context around upcoming earnings announcements. For this week, the options market is pricing in a +-$3.81 stock price move, which is about 7.5% of the notional value of the stock price at $51.87. 

This is a large implied move relative to the stock price, as most reporting companies fall between 5-10% of the stock price with a few exceptions above and below that typical range. 

Looking further out in time, we can see that the May options expiration is pricing in a +-$6.00 stock price move. This means the earnings implications are massive for Nike, as the three-day options cycle makes up 63.5% of the options cycle 46 days away. Nike executives are in the corner, and the market wants answers. We’ll see if we get them on Tuesday after the market closes. 

Bullish on Nike Stock for Earnings 

If you’re bullish on Nike stock for earnings, you really want some kind of surprise announcement on top of better-than-expected earnings results. With the stock price so depressed, the future of the company needs to look bright for the stock to meaningfully recover. It will be interesting to see if the executive team can spin a positive light on anything this quarter, as the market is expecting large drawdowns in margins. It’s possible that even a stabilization of results and forecasts could be good for the stock, simply because we’re sitting at near-decade lows. 

Bearish on Nike Stock for Earnings 

If you’re bearish on Nike stock for earnings, you likely believe that the KO punch is coming soon with global tensions and tariffs not going away. The reductions in margin and bleak global forecast can’t be offset by North America alone, and the executive team will need to drum something up to give traders & investors a light at the end of the tunnel. It’s a tough spot for Nike, but any earnings miss or bleak forecast could send the stock price even lower than it is now. 

Join me on Options Trading Concepts Live at 11am CST for a deeper look at Nike options strategies for earnings, only on tastylive! 

Mike Butler, tastylive director of market intelligence, has been trading the markets for a decade. He appears on Options Trading Concepts Live, Monday-Friday. @tradermikeyb

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