Nike Stock Hits 12-Year Low and What Comes Next is Hard to Gauge

Estee Lauder (EL) reported four consecutive earnings beats, raising its fiscal 2027 EPS guidance to $3.10-$3.35. Nike (NKE) guided revenue down, with Greater China down 12% and Converse down 32%. EL's stock rose 10.46% post-earnings, while NKE's turnaround timeline extends. EL's forward P/E is near 32, with a 1.3% yield. NKE offers a 4.3% yield but faces declining revenue.

Nike has re-established the chief commercial officer role, appointing Jane Ewing from Walmart. She will lead global marketplace operations, reporting to CEO Elliott Hill. The position was eliminated in December. Hill believes Ewing's experience will drive growth in Nike Direct and wholesale.

Stocks were flat ahead of Nvidia's earnings and Fed Chair Warsh's speech. PCE inflation data exceeded expectations, with the index rising 0.2% monthly and 3.7% yearly. Nike fell 2.3% to a 12-year low after a downgrade by Truist Securities. Nvidia dropped 1.6% ahead of its earnings report. Meta agreed to an $18 billion settlement over child safety concerns.

Nike (NKE) shares fell 2.25% to $38.59, a 10-year low, after an analyst downgrade from 'buy' to 'hold' due to retail footwear concerns. Trading volume was 35% above average. The S&P 500 and Nasdaq also declined slightly. Adidas and Deckers Outdoor saw mixed movements.

The Dow Jones fell 113.52 points (0.21%) as the July PCE price index rose 3.7% YoY, exceeding expectations and raising inflation concerns. The Nasdaq also declined, with investors cautious ahead of Nvidia's earnings. Nike and Merck fell, while Caterpillar gained. Rising interest rates weighed on sentiment, with the PCE data suggesting prolonged Fed rate hikes.

Dick's Sporting Goods (DKS) reports challenges tied to Nike's sales decline, with CEO Elliott Hill noting industry-wide inventory issues. DKS cut its full-year earnings forecast, leading to a 30.7% stock drop. The company's dividend yield is 3.86%, but sustainability is questioned due to earnings cuts. DKS has a GF Score of 86, indicating strong fundamentals but valuation risks. Insiders sold $4.58M in shares recently, raising concerns.