Nike Inc (NYSE:NKE) will report fiscal third-quarter results on Thursday, March 20.

Analysts already incorporated company challenges in the guidance. The results are likely to be broadly in line with expectations, according to Telsey Advisory Group.

The Nike Analyst: Analyst Cristina Fernández reaffirmed a Market Perform rating and price target of $80.

The Nike Thesis: Given lower demand for its products, a reduction in units of three key lifestyle franchises, and higher promotions to clear inventory, the company is likely to report a 12% decline in sales versus consensus of 11.3%, Fernández said in a note.

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Gross margins are likely to have contracted to 41.5%, versus consensus of 41.8%, she added.

The analyst mentioned the key areas to watch during the earnings call:

• Progress on inventory reduction
• Impact of the shift in clearance activity from ecommerce to factory stores
• Magnitude of further reductions in lifestyle franchise units
• Pace of product innovation and potential for new products
• Retro products making a comeback to offset declines in other parts of the business
• The recently announced launch of the NikeSKIMS brand to broaden the reach for Nike in women's apparel

While Nike will announce the initial guidance for fiscal 2026, it had indicated that reductions in lifestyle franchise units, a mix shift toward lower margin products, and steps to improve relationships with wholesale partners will have adverse impacts on both sales and profitability in fiscal 2026, she stated.

"We don't expect a significant direct impact to Nike from tariffs given the majority of Nike products manufactured in China (15% of total) serve the Chinese market, with only a small portion of those imported into the US (both adidas and Under Armour have noted that only 3%-4% of the products made in China are sold in the US)," Fernández further wrote.

Price Action: Shares of Nike had risen by 2.09% to $73.12 at the time of publication on Monday.

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