It is disappointing to be one Nike (NYSE: NKE) In the last few years, investors, but the new CEO Elliot Hill indicated that the investors indicated that the worst was now behind the company when it reported the results of its fiscal fourth quarter.

Nike shares increased the results, which topped the low expectations, although the stock is still down in the year and is less than 20% in the last five years.

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Let’s do to see Nike’s recent earnings to see why now there is a good time to take shares in the prestigious sneaker and Garment Manufacturer.

Image Source: Getty Image.

The worst is over

Hill, who has been on a job for less than a year, is working hard to help changing Nike’s business after former CEO John Dhoahin’s wrong. The anterior to Hill ignored innovation and pushed the company’s classic footwear segment, including brands such as Air Jordan and Air Force 1. He also pushed a large direct-consumer, ignoring important wholesale relations.

Hill its victory is now working to resume the damage done by Doahno through the action plan. The main principle of his plan is Nike to return to his innovation roots. He has reorganized the business to run sports-specific innovation in his three main brands: Nike, Jordan and Converms. The company has seen some initial tractions with new innovation, with its Vomero 18 running shoe launched with strong sales after 90 days after a $ 100 million-plus franchise.

The company has handled its relationship with wholesalers. To this end, it recently announced a new partnership HeroicWhere e-commerce giants will take a select classification of nike footwear, costumes and accessories. Nike also hired retail marketing, visual merchandising and account managers to help in helping and creating better consumer connections.

In addition, the company is trying to implement sharp marketplace division to serve its customers at various price points. At the same time, it is looking at Nike to direct digital and nike as premium destinations. This means that you may be able to get some low -priced nike products in a retailer KohalWhile Nike will have its own high-end products with the latest technology on its apps and its stores.

While the actual results of Nike were still weak, Hill said it is time to turn on the page and he hopes that Nike results will improve moving forward.

For fiscal Q4, Nike’s revenue declined by 12% to $ 11.1 billion, with Nike brand revenue below 11% to $ 10.8 billion. NIKE Direct Repenses from 14% 14% to $ 4.7 billion, as digital sales fell 26%. This is largely due to the company re -introducing its digital app as a major destination. Wholesale revenue, meanwhile, fell 9% to $ 6.4 billion.

China remained a weak place, with revenue to $ 1.5 billion in the quarter of 21%. Nike has been given huge discounts in China to reset his inventory.

North America’s revenue fell by 11%, with costume sales 7% and footwear revenue fell 13%. Emea (Europe, Middle East and Africa) sales were 9%, while Asia Pacific and Latin America sales decreased by 8%.

Heavy discounts for clear inventory continued to weigh on the nike Gross marginWhich fell to 440 basis points to 40.3%. Between the decline in sales and gross margin, its earnings fell by 86% in the quarter per share (EPS).

The company stated that tariff would be a significant new cost headwind, which represents an estimated $ 1 billion in gross costs. It states that Tariff damaged its gross margin from 75 base points in this financial year, with great impact in the first half. It is currently working with suppliers and retail partners to reduce cost and impact on consumers.

Is Nike Stock a purchase?

While Nike’s progress has not yet shown in its results, the hill is helping to bring back the company back on the track. He is bending in innovation, rebuilding wholesale partnerships, renovating Nike app and storing a premium destination, and working to divide the brand into both premium and core offerings based on the channel.

While the stock trades on a very heavy evaluation, with one Forward price-to-kamai (p/e) The ratio of 2026 estimates of about 39 times analysts, this is largely because Nike’s earnings have become depressed. If Hill Nike’s EPS can be taken back to $ 3.73, it was in the financial year 2024, the stock will trade in less than 20 times.

Nike still has to work, but now there can be a good opportunity to buy stocks when the company is showing signs of a turnaround and the stock is still down in the year.

Should you now invest $ 1,000 in Nike?

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