Nike investors are watching closely. This Thursday, they want to see if Nike is really bouncing back, as the company suggested last quarter. The main question is whether their big marketing campaign is helping them catch up to faster-growing competitors.
Nike, which has led the athletic wear market for years, is now facing strong competition from newer brands like On and Hoka. The situation in China remains uncertain. CEO Elliott Hill says the company will focus again on core sports such as running and soccer.
First, Nike needs to clear out excess inventory, mostly by selling it at lower prices. This is reducing sales, and tariffs are also cutting into profits. Last quarter, Nike said tariffs would cost them $1.5 billion this year, mainly because they operate heavily in high-tariff countries like Vietnam.
Before the earnings report, Nike posted nearly 60 open marketing jobs on their website and held a job fair in New York. CFO Matthew Friend said in September that the company plans to increase its marketing spending.
Experts at LSEG estimate that Nike’s marketing costs could rise to over $5 billion in 2026, up from $4.68 billion in 2025. This suggests the company is regaining confidence and recognizes the need to invest to remain competitive.
Analysts expect that Nike’s net profit has likely fallen for the sixth straight quarter, dropping by more than half to $562.35 million. Second-quarter sales are projected to decrease by about 1% to $12.22 billion, following a slight increase previously. Gross profit is also expected to be slightly lower, at around 40.77% compared to 42.2% last quarter. Some observers note that Nike has not released any major new products recently, so the company has been relying on established marketing themes. However, with new releases such as the updated Pegasus Premium and Vomero 18 running shoes, their messaging may shift. Still, expectations for this quarter remain modest.
China is a tough market, accounting for 15% of Nike’s sales. Local brands like Anta and Li-Ning are getting more popular, and most stores in China are single-brand, which makes it hard for Nike to sell in different places as it does in the US.
With running becoming more popular and the World Cup approaching, Nike sees an opportunity to get back in the spotlight. They’re also teaming up with Kim Kardashian’s SKIMS brand to try to attract more people and grow again.
Now, investors are eager to see whether this strategy can offset weak sales, high tariffs, and widespread competition, and how long it will take to deliver results.
