Nike (NKE) Stock Is Up, What You Need To Know

What Happened?

Shares of athletic apparel brand Nike (NYSE:NKE) jumped 4.9% in the afternoon session after the company posted third-quarter results that surpassed Wall Street's expectations for both revenue and profit. The athletic apparel giant reported revenue of $11.72 billion, a modest 1.1% increase year-on-year, but this was enough to comfortably beat analyst estimates of $11 billion. Similarly, its GAAP earnings per share of $0.49 was significantly ahead of the $0.27 consensus forecast. Despite the strong beat against expectations, the results showed some underlying weakness. The company's earnings per share declined from $0.70 in the same quarter last year, and its operating margin contracted to 7.7% from 10.4%, indicating that expenses grew faster than revenue.

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What Is The Market Telling Us

Nike’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 29 days ago when the stock dropped 4.1% on the news that the major indices continued to retreat amid profit-taking and renewed concerns about tariffs. Investors reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds. Rising Treasury yields added to the pressure, with the 10-year climbing above 4.2% and the 30-year nearing 5%, intensifying worries about stretched equity valuations. September's historically weak track record for stocks further dampened sentiment, leaving traders cautious ahead of the jobs report later in the week and the Federal Reserve's upcoming rate decision.

Nike is flat since the beginning of the year, and at $74.01 per share, it is trading 17% below its 52-week high of $89.13 from September 2024. Investors who bought $1,000 worth of Nike’s shares 5 years ago would now be looking at an investment worth $584.41.

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