Nike Inc. reports fiscal second-quarter earnings after the bell Thursday, and the stakes couldn't be higher. The athletic apparel giant has seen its stock fall roughly 46% over the past year while competitors like On Running and Hoka have eaten into market share. Tonight's results will reveal whether new management can reverse the slide.

What Wall Street Expects

Analysts expect Nike to report:

  • Revenue: $12.2 billion (down 1.7% year-over-year)
  • Earnings per share: $0.37-$0.38 (down roughly 50% from a year ago)

Those expectations are notably subdued. A year ago, Nike was expected to return to growth. Now analysts are forecasting continued declines—a stark reminder of how quickly the narrative has shifted.

The Challenges Piling Up

Nike's problems are multifaceted:

Legacy product hangover: The company is deliberately phasing down aging franchises like Air Force 1, Dunk, and Jordan 1 under its "Win Now" strategy. While necessary for long-term brand health, the transition is creating near-term revenue pressure.

China weakness: Greater China remains a major overhang. The region, historically a profit engine, continues to struggle with both digital and physical channel weakness.

Competitive pressure: Upstarts like Vuori, Alo Yoga, On Running, and Hoka have captured consumer enthusiasm that once belonged to Nike. The Swoosh's brand heat has cooled considerably.

New Leadership

Nike appointed Venkatesh Alagirisamy as Executive Vice President and Chief Operating Officer effective December 8. The move signals recognition that operational execution needs to improve, not just strategy.

Whether new leadership can move the needle quickly remains to be seen. Turnarounds at Nike's scale take time—time that impatient investors may not be willing to grant.

What to Watch Tonight

Beyond the headline numbers, investors should focus on:

  • Gross margin trends: Are promotional pressures easing?
  • China commentary: Any signs of stabilization?
  • Inventory levels: Has excess stock been cleared?
  • Forward guidance: Is management willing to commit to a recovery timeline?

The Bull Case

Nike bulls argue the stock is oversold, trading at multi-year lows relative to earnings. The brand remains globally iconic, with distribution and marketing capabilities no competitor can match. Any positive surprise could spark a significant short-covering rally.

The Bear Case

Bears counter that Nike's problems are structural, not cyclical. The direct-to-consumer pivot alienated retail partners. Product innovation has lagged. And the competitive landscape has permanently shifted against the incumbent.

The Bottom Line

Nike's earnings tonight represent a critical test. Beat expectations and provide encouraging guidance, and the turnaround story gains credibility. Miss and disappoint, and investors may conclude the worst isn't over. After a brutal year, the Swoosh needs a win—tonight we'll see if it can deliver one.