Nike ,Tip -1.36%, Stock jumped 16% on Friday after a report of its fiscal fourth quarter earnings on Friday. This step will benefit the largest one day percentage for stock over many years.

Nike has been in the spiral at a bottom since its peak in 2021, which is a strategic change towards the direct-to-consumer channel under former CEO John Doahno. However, after offering guidance for the first quarter of the new financial year, which topped the expectations, the management gave investors a ray of hope for the first time in years.

As expected, the fourth quarter results were ugly, but they were still at the top of expectations. The revenue fell 12% to $ 11.1 billion, but it was ahead of $ 10.72 billion, and the gross margin was contracted from 440 basis points to 40.3%, which was 40.3% due to discounts due to clear inventory and wholesale channel changes. At the bottom line, the company reported an income of $ 0.14 below $ 0.99 in the quarter a year ago, but it was slightly ahead of the expectations of $ 0.12.

In response to the results, the stock was initially flat, but increased when the company gave its guidance for the first quarter. The company hopes that the revenue will be below the middle-certain points and compresses the margin again, calls to call Gross margin 350 to 425 base points, including 100 base points of tariff-related headwind.

It also looks at sales, general and administrative expenses up to low single digits. Overall, the forecast asks for profit to fall again, although the guidance was still better than expected. The management also said that it is expected to add tariffs $ 1 billion to its cost for the year.

What is speed shifting?

Nike results and guidance were not good in any way, but the company said that the headwind in revenue and margin would be moderate after the fourth quarter, and it came through that forecast.

Additionally, CEO Elliot Hill continued to postpone the operational turnaround in the business as they refreshed their management team, realizing the company’s management teams, leveraging the leadership structure. Nike has the right to classic sneaker brands such as Air Force 1, Dunk and Air Jordan 1, and it is looking at speed in major businesses such as running, which has increased high-assay points in the quarters. The launch of Las Vegas Aces Star A’that first signature shoe’s first signature shoe was sold on Nike Digital in Nuke Digital in three minutes.

It is also improving wholesale relations with major partners Dick game items And JD sports In Europe, where it is watching its training collection and growing through sales around its products such as Air Max 95. Finally, events such as the after Dark Run Series in Los Angeles have helped re -resonating and promoting sales in local markets.

Is Nike a purchase?

In addition to the increase in stock, Nike achieved a chorus of positive analyst notes and increases the price target, and HSBC Upgrade stock to buy.

It is clear that Wall Street believes that a change is going on, and it is easy to see why. Most of the challenges of Nike under Doahno were self-inspired, which included ignoring wholesale partners, transferring too much for performance marketing on brand marketing, and relying on classic brands, while ignoring innovation.

Even after Friday’s jump, the stock is still about 60% below its all -time high. However, Nike is still away from returning to its back heights, given that it reports barely profit in the fourth quarter and is likely to be the same as the first quarter. Revenue is also decreasing.

In other words, Nike looks like a purchase, but investors will have to be patient. There are some potential positive catalysts for the company’s arrival, including the expected launch of Cateline Clarke’s signature shoe, which is in work, and the new product of Nike is ready in North America for next year’s World Cup.

With impaired income, the evaluation of Nike will look at least ugly for the next year, but its business should be able to return to its back heights and the stock should also be with enough time.