Nike Inc (NYSE:NKE, XETRA:NKE) is set to report its fiscal third quarter results on Tuesday, with Jefferies analysts highlighting that the report comes amid steady progress in the athletic apparel and footwear company’s ongoing turnaround strategy.
The firm maintained a ‘Buy’ rating on Nike with a price target of $110, suggesting potential upside of more than 100% from current levels.
According to Jefferies, North American operations and wholesale channels are driving growth, while inventories have declined about 20% from their peak. Last quarter, North America grew approximately 9%, with wholesale up around 8% overall and 24% in the region.
Running shoes have been highlighted as a standout category, reporting roughly 20% growth for a second consecutive quarter, and soccer-related bookings tied to the upcoming World Cup are running 40% ahead of the 2022 tournament period.
Despite these gains, challenges remain. Greater China sales are expected to stay below $6 billion, with margins compressing from over 30% to the mid-teens. Nike Digital, which has faced eight consecutive quarters of declines, is showing early signs of improvement with positive web traffic trends.
Jefferies expects Nike to report adjusted earnings per share of around $0.31 for the quarter, slightly above the Street consensus of $0.30, with an estimated EBIT margin of 5.2%.
The analysts noted that the company continues to realign costs while reinvesting in growth, including one-time restructuring charges of approximately $300 million in the quarter.
“This remains a deliberately sequenced execution story, with China and Nike Digital next in line rather than immediate fixes. At current levels, investors can own one of the most ubiquitous global brands trading at a cycle‑low,” they wrote.
“With the turnaround underway and a clear global catalyst ahead in the World Cup, we see risk‑reward skewed to the upside.”