Nike (NYSE: NKE) is set to announce its fiscal fourth-quarter earnings (for the year ending in May) on Thursday, June 26, 2025, with analysts anticipating earnings of 12 cents per share on $10.71 billion in revenue. This would reflect an 88% decline in earnings year-over-year and a 15% decrease in sales compared to the previous year’s figures of 99 cents per share and $12.62 billion in revenue. Historically, NKE stock has decreased 65% of the time after earnings announcements, with a median one-day drop of 6.8% and a maximum observed decline of 20%.
For the third quarter of fiscal year 2025, which concluded on February 28, the company indicated weak performance and expected a low-to-mid-teens revenue downturn in the fourth quarter. Additionally, gross margins are projected to compress by 4 to 5 percentage points due to aggressive inventory clearance strategies. The full-year fiscal 2025 revenue is expected to decrease by 11%, with a slight 1% decline anticipated for fiscal 2026, indicating a slow and gradual recovery. The company has a current market capitalization of $88 billion. Revenue over the past twelve months was $48 billion, and it operated profitably with $4.9 billion in operating profits and net income of $4.5 billion.
For event-driven traders, historical patterns could provide an advantage, whether by preparing before earnings or responding to post-release movements. That said, if you’re looking for upside with less volatility than individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 with returns exceeding 91% since its launch.
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Historical Odds Of Positive Post-Earnings Return
Some insights on one-day (1D) post-earnings returns:
- There are 20 earnings data points recorded over the last five years, with 7 positive and 13 negative one-day (1D) returns documented. In summary, positive 1D returns occurred approximately 35% of the time.
- However, this percentage drops to 17% when considering data for the last 3 years instead of 5.
- The median of the 7 positive returns = 6.7%, and the median of the 13 negative returns = -6.8%.
Additional data for the observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively less risky strategy (though not effective if the correlation is low) is to comprehend the correlation between short-term and medium-term returns post earnings, identify a pair that has the highest correlation, and execute the suitable trade. For instance, if 1D and 5D have the highest correlation, a trader can take a “long” position for the next 5 days if the 1D post-earnings return is positive. Here is some correlation data based on the 5-year and 3-year (more recent) history. Note that the correlation 1D_5D denotes the correlation between 1D post-earnings returns and following 5D returns.
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