Nike Stock Tumbles Toward 9-Year Low: Retail Traders Shrug Off Soft Outlook To Scoop Up ‘Crazy Good Pricing’

• Nike shares dropped 9% in Wednesday’s premarket.
• Weakness in the sportswear giant’s China business is a major overhang. 
• Still, retail traders on Stocktwits appeared upbeat about NKE, saying the historic low is a long-term buying opportunity. 

Nike, Inc. shares fell 9% to $48 in early premarket trading on Wednesday, sliding to a nearly nine-year low, after the company warned that sales would decline this year, raising fresh doubts about its turnaround effort now in its second year.

Still, retail traders on Stocktwits appeared upbeat, saying the historic low is a long-term buying opportunity. 

Nike expects sales to fall by low single digits from now through the end of 2026, with a 2% to 4% decline in the current fiscal fourth quarter. Analysts had forecast a 1.9% increase this quarter.

The forecast projects a 20% sales decline in China for the current quarter. Sales in the country declined 7% in the last quarter.

Q3 Results Recap

The guidance overshadowed third-quarter results, which came in ahead of expectations. Revenue was roughly flat at $11.28 billion, compared with analyst estimates of $11.23 billion. Profit declined to $0.35 per share from $0.54 last year, but was above the $0.29 target.

On the analyst call, CEO Elliott Hill said Nike saw recovery on the back of its running, wholesale, and North American businesses, but other areas – particularly the China business, its Converse brand, and sportswear unit – were taking longer to recover.

Running sales were up more than 20% in the last quarter, and the category is creating a roadmap for improvement that other sports can follow, Hill said. 

The company added that it would now focus on getting its soccer business back on track ahead of the World Cup, which will be co-hosted by the United States this year, and sees its basketball business returning to growth over the next few quarters. 

Retail, Analyst View On NKE

On Stocktwits, the retail sentiment for NKE was ‘extremely bullish’ as of early Wednesday, compared to ‘bearish’ two days prior.

“Crazy good pricing to go long,” remarked a user, while another wrote: “$NKE Tim Cook was buying when it was 57. So why not buy when it's 48?” Cook, Apple’s CEO, is on Nike’s board of directors and has reportedly worked with leadership to enable the much-awaited turnaround at the sportswear giant.

On the other hand, some were also of the view that NKE would slide in the future and shorting the stock was the way to go.  “This is a generational opportunity to short. One can hardly find other instances with so much potential. I am doubling my position in the overnight market!” said a user.

CNBC “Mad Money” host Jim Cramer said on X that he was disappointed with the results. “Gotta stick with tech,” he said.

To be sure, pre-earnings analyst actions had already signaled caution. Several brokerages, such as BTIG, Evercore, and Telsey, have flagged China as a key risk factor.

As of the last close, Nike shares are down 16.5% year-to-date. The stock trades at a forward price-to-earnings ratio of 26.1x, compared with roughly 14x for Deckers Outdoor Corporation.

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