Nike technically beat on EPS at $0.35 and matched revenue estimates at $11.28 billion. None of that mattered. The stock dropped 15.5% on Tuesday to $44.63, its lowest level since 2017. The problem wasn't what happened last quarter, it was what comes next.
Management guided for another 2-4% sales decline in Q4 and said the turnaround under CEO Elliott Hill is taking "longer" than expected. Operating margin fell to 5.6% from 7% a year ago. That's the kind of margin compression that makes institutional holders start trimming positions. And three major banks did exactly that before the market even opened Wednesday.