F'4Q Preview: Turnaround Taking Hold, F’27 Marks the Stabilization Phase

Research evidence excerpt

F'4Q Preview: Turnaround Taking Hold, F’27 Marks the Stabilization Phase

rch...

Innovation and Marketing Engine Firing for the World Cup. The WC product cycle is live, with 30%25%

Mercurial split into Vapor 17 and Superfly 11, alongside Phantom 6 and Tiempo across price points. 20%15% 15.3%

5%Federation kits span 12 teams with Aero-FIT, while X2 capsule collections pair 7 federations with 10% 3.0%

(5%)collaborators. Activation spans 5K+ doors and key global cities, providing a catalyst to reaccelerate (10%)0% (7.8%)

apparel demand. (15%)(20%)

(25%)

What Still Needs Work? . May-25 Jun-25 Jul-25 Aug-25 Sep-25 Oct-25 Nov-25 Dec-25 Jan-26 Feb-26 Mar-26 Apr-26 May-26

Source: SimilarWeb, Jefferies

...And Inventories Better Positioned.

Stabilization in Direct, EMEA, and China Would Validate the Reset. F'3Q revealed pressure in Direct $12,000 $9,662 50%

40%(down 7% cc) remains and a softening in EMEA; both need stabilization signals in F'4Q to validate $10,000

the marketplace reset. Greater China remains the largest reset; revs tracking below ~$6B with EBIT $8,000 $7,487 30%20%

10%margin compressing from >30% to low-20s, which we view as a likely F'26 trough. We are looking $6,000$4,000

for sequential stabilization color and progress on local marketplace cleanup. $2,000 0%(10%)

$0 (20%)

Setup Skews Constructive; Expect Mgmt to Leave New CFO Clean Slate. Investors will key on 1Q22 2Q22 3Q22 4Q22 1Q23Inventory2Q23 3Q23 ($)4Q23 1Q24 2Q24 Inventory3Q24 4Q24 1Q25YoY2Q25Growth3Q25 4Q25 1Q26 2Q26 3Q26

how NKE guides F'27, with conservatism likely embedded allowing Mr. Denton to set LT targets .Source: Company data, Jefferies

(sales & EPS growth and GM recovery path) at the Investor Day that NKE can anchor to and own Randal J. Konik * | Equity Analyst

going forward.