Nike stock (NYSE:NKE) is approaching its fiscal Q4 2025 earnings report on June 26 with much to prove. The iconic sportswear brand has underperformed the broader market this year, sliding 20.5% year-to-date amid concerns about sluggish sales, soft consumer demand, and macroeconomic headwinds. While expectations for this quarter remain muted, investors are watching closely for signals of a turnaround.

Q4 Challenges Already Priced In?

Nike’s Q4 is likely to be weak on nearly every front. Management has already guided for a mid-teens revenue decline year-over-year, citing unfavorable shipment timing in North America, currency headwinds, and inventory issues. Gross margins are expected to fall 400–500 basis points due to restructuring costs, discounting, and a shift in product mix.

Adding to the pressure is soft traffic across Nike’s direct-to-consumer and wholesale channels, as well as persistent weakness in China, a critical international growth market. While Nike has consistently beaten earnings estimates in recent quarters, analysts are bracing for a steep drop in Q4 EPS—from $1.01 last year to just $0.11 this quarter.

Still, some believe Nike stock may already reflect much of this pessimism. With lowered expectations baked in, any positive surprise or optimistic guidance could serve as a catalyst.

Tariffs and Global Trade Uncertainty

Nearly all of Nike’s production takes place outside the United States, which makes it particularly vulnerable to international trade disruptions and tariff changes. As the U.S. navigates a volatile trade landscape, potential cost increases and supply chain delays remain ongoing risks.

Management is expected to address how the company plans to mitigate these risks, especially as Nike ramps up innovation and seeks operational efficiency in its sourcing and manufacturing processes.

Nike’s Roadmap to Recovery

Despite near-term challenges, Nike is actively laying the groundwork for a rebound. A renewed focus on innovation, particularly in performance and sport-specific footwear, is central to this effort. The company is launching fresh product designs every season and gradually reducing reliance on legacy models.

On the digital front, Nike is revamping its approach. Rather than relying on aggressive online markdowns, Nike is redirecting clearance inventory to its Nike Factory Stores. This move helps preserve premium brand perception while ensuring more strategic inventory management.

Though this shift is expected to result in lower digital traffic in the short term, Nike believes this strategy will position its e-commerce platform for sustainable growth as new collections and storytelling campaigns roll out.

Strategic Wholesale and Factory Store Moves

Nike is also cleaning up the broader retail ecosystem. It is reducing forward supply to wholesale partners, supporting cleaner sell-through and better margins. Simultaneously, deeper discounts at factory stores are helping Nike move excess inventory without overburdening its core channels.

These initiatives aim to stabilize wholesale relationships while positioning Nike for more consistent revenue growth and fewer product returns.

What Wall Street Thinks

Analysts remain cautiously optimistic. The consensus rating on Nike stock is “Moderate Buy,” with a 12-month average price target of $73.24—representing roughly 22% upside from current levels.

Investors are expected to look beyond Q4’s weak headline numbers and focus on forward-looking commentary. If management can signal stabilization in China, improvement in direct-to-consumer momentum, or a path to margin recovery, it could reignite bullish sentiment.

Should You Buy Nike Stock?

Nike’s Q4 2025 may reflect the final stretch of a difficult chapter, but the company is already planting seeds for a comeback in fiscal 2026. With a brand legacy rooted in innovation and a refined retail strategy underway, Nike stock could regain its stride—especially if macroeconomic conditions and global trade tensions ease.

For long-term investors, this week’s earnings may offer a glimpse into whether Nike’s turnaround plan has real traction—or still has miles to go.