ii view: can football World Cup help Nike recover?

The Nike logo on a training bib during the World Cup 2026. Photo: Eddie Keogh - The FA/The FA via Getty Images.

Fourth-quarter results to 31 May

• Revenue down 1% to $10.97 billion (£8.17 billion)
• Adjusted earnings up 42% to $0.20 per share
• Shareholder returns of $609 million, unchanged from the prior quarter

Guidance:

• Continues to expect relatively flat earnings growth for Q1 and Q2

Chief executive Elliott Hill said:

"In fiscal 2026, we took decisive actions to strengthen the foundation of Nike, Inc. and reposition our business for long-term growth."

"We made meaningful structural improvements to lay the groundwork for our Sport Offense across our team culture, innovative product, brand strength, and how we serve consumers in our countries and cities. While we continue to face top-line headwinds, we're encouraged by progress in performance product and are focused on consistent execution, improved profitability and scaling our wins to realize our full potential.”

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ii round-up:

Nike Inc Class B (NYSE:NKE) is a maker, distributor and retailer of athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities.

For a round-up of these latest results announced on 1 July, please click here.

ii view:

Founded in 1964, the company takes its name from Nike, the Greek goddess of victory. Footwear generated most sales over its last financial year at 66%, with clothes at 28% and equipment the balance. Geographically, North America made most sales during its last financial year at 44%, followed by the combined Europe, the Middle East and Africa at 27%, China 15%, and Asia and Latin America the balance of 14%.    

Back under former chief executive Elliott Hill, Nike is pursuing a ‘Win Now’ transformation programme. Initiatives include reprioritizing sales to other retailers or use of its wholesale channel over direct sales, as well as pushing product innovation and group-wide efficiency. The group’s many competitors include adidas AG (XETRA:ADS), Puma SE (XETRA:PUM), New Balance and Under Armour Inc Class A (NYSE:UAA).

For investors, a previous reliance on established brands like Jordans and product innovation from players such as New Balance, have hindered sales and required increased marketing spend. A war in the Middle East and subsequent elevated energy prices increase inflation risk, potentially leaving interest rates higher for longer and affecting consumer spending. Trump trade tariffs now add to group costs given it manufactures products in Asia and exports to its home US market. Trade tensions between the US and China are likely hindering sales in China, while a forecast price/earnings (PE) ratio in line with the three-year average may suggest the shares are not obviously cheap.  

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More favourably, a performance improvement programme under returning CEO Elliott Hill is ongoing, with advertising and social media most recently focused on the football World Cup. Some payback of previous US trade tariffs paid has been seen, with trade negotiations between the US and China ongoing. A diversity of both products and geographical locations exists, while increases in the dividend payment since 2004 now leave the shares on a forecast dividend yield of almost 4%.

For now, management initiatives and a consensus analyst fair value estimate above $51 per share offer hope. That said, more risk adverse investors may decide to await firmer evidence of profit recovery before dipping in.

Positives:

• Product and geographical diversity
• Ongoing shareholder returns

Negatives:

• Uncertain economic outlook
• Subject to currency moves

The average rating of stock market analysts:

Strong hold