Nike stock soars 17% after CEO soothes investors, says recovery is on the horizon

Nike confirmed that the largest financial impact from its turnaround plan is now in the past, boosting investor confidence that the company's results will soon stabilize

A number of Wall Street banks, including HSBC, issued bullish ary on the stock the morning after it released fiscal fourth-quarter results, with some saying key strategies are showing signs of gress

While Nike's turnaround is showing signs of life, the company couldn't say when it will return to growth

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Richard Baker | In Pictures | Getty ImagesNike stock soared 17% on Friday after the company said the worst of its struggles are behind it, ing a better-than-feared fiscal fourth-quarter earnings report

Nike on Thursday reiterated it would take the biggest financial hit from its turnaround plan during the quarter, soothing investors who worried President Donald Trump's tariff hikes on key Nike manufacturing hubs China and Vietnam would derail the company's comeback

But CEO Elliott Hill stressed the company has emerged from the worst of its slump, and the slide in sales and fits would begin to moderate in the quarters ahead. "The results we're reporting today in Q4 and in FY25 are not up to the Nike standard, but as we said 90 days ago, the work we're doing to reposition the through our 'Win Now' actions is having an impact," said Hill on an earnings call, referencing the name of the company's turnaround plan. "From here, we expect our results to imve

It's time to turn the page. " With few details the gress of Nike's turnaround strategies in the company's earnings release, the company's s initially fell when it posted results after the closing bell Thursday

Beyond assuring investors that the turnaround plan is working, Hill d mising on new duct launches and Nike's efforts to win back wholesale partners, which have been key areas of focus since he took over in October

During the quarter, the company launched ducts in more than 200 women's led shops, including Aritzia, and released its collection with WNBA star A'ja Wilson, which Hill said sold out in three minutes

By Friday morning, the stock climbed even higher after numerous banks issued bullish ary on the company

HSBC upgraded Nike to buy from hold, its first buy rating on the stock in 3½ years

HSBC also raised its price target to $80, implying 28% upside from Thursday's close. "Long in the making but we think the inflection is finally here," analyst Erwan Rambourg wrote in a re note. "We think there is more than tangible evidence that Nike has a path to see its sales rebound in the not-too-distant future, and its margins to be repaired, and this despite an unfavorable tariff headwind. " Nike's results show the company is rebounding on a timeline Wall Street s

But don't call it a comeback just yet

The sneaker giant is trying to grow again at a shaky time for the economy, as weaker consumer sentiment, rising debt, tariffs and mass deportations raise questions spending and GDP

Nike still expects sales to decline in its current quarter by a mid-single-digit percentage, in line with Wall Street expectations of a 7% drop, according to LSEG

It also has more work to do to out stale lifestyle inventory from its classic Dunks and Jordan lines

Those efforts to liquidate old inventory have hit fit margins and sales because Nike has had to rely on deep discounts, ance channels and the off-price sector to out that glut

In the fourth quarter, that accelerated to 30%, which impacted sales by nearly $1 billion, finance chief Matt Friend said

Air Force 1 inventory levels have started to stabilize but Nike is still working to out supply of its Dunk franchise, which will affect the company's fits through the first half of its current fiscal year, said Friend

Both Hill and Friend said Nike's fits will be under pressure through the first half of fiscal 2026 as it works through its inventory and contends with higher costs from tariffs

They said they expect fits to imve in the second half of the year

However, when it comes to actual sales growth, it's still too early to tell when the company will stop shrinking

When asked if there are any scenarios where the company could get back to revenue growth this year, Hill declined to a timeline. "Just because of everything that's going on, we're going to take it 90 days at a time," said Hill. "We believe full recovery will take time. "Correction: This article has been d to correct the spelling of Aritzia