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Breakfast News: Nike's Marathon Task

March 21, 2025

Thursday's Markets
S&P 500
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A tortoise and a hair about to start a race.

1. Nike Earnings Call Deflates Optimism

Nike (NKE -2.14%) fell over 5% after the market closed, reversing an initial pop following the release of Q3 results that beat on earnings. CFO Matthew Friend warned of the costs involved for the turnaround plan, plus upcoming impacts of tariffs – particularly the 20% duty on imports from China – during the subsequent earnings call.

  • Q4 revenue expected to decline "down in the mid-teens range, albeit at the low end": Friend shared disappointing guidance for next quarter, citing multiple headwinds. Third-party data showed Nike app downloads were down 35% versus a year prior, with foot traffic in store down 11%.
  • "I wouldn't underestimate the power of Nike's brand": Fool analyst Jason Moser commented "Elliott Hill has his work cut out for him as the new CEO of Nike [and] investors will need to give him some time to execute."

2. Apple Forced to Play Catchup

Apple (AAPL -3.82%) is undergoing a raft of changes including a reshuffle of senior leadership positions as it tries to get AI efforts back on track and regain ground in the streaming space.

  • Scrambling to catch up in generative AI: CEO Tim Cook has pulled in Vision Pro creator Mike Rockwell to help AI head John Giannandrea following the annual offsite where AI efforts were the key talking point. Apple Intelligence hasn't yet delivered as expected, with the tech lagging rivals.
  • High 7% February churn rate versus 2% for Netflix: Apple's streaming platform is reportedly losing $1 billion a year, with the budget to spend on content having been cut from $5 billion back at launch in 2019 to about $500 million last year. Factors include higher competition and a picky consumer.

3. Mining Stocks Pop on Trump Support

Precious mineral stocks within the U.S. mining sector jumped following an executive order signed by President Trump to boost domestic production and make the country less reliant on foreign imports.

  • "Immediately begin producing energy with beautiful, clean coal": Trump's comments helped MP Materials (MP 10.13%) jump around 4% in pre-market trading, with Peabody Energy (BTU -0.65%) popping more than 2% on the news. The order pushes for faster permit approvals and prioritizing mineral production on federal land, boosting revenue potential for companies in this area.
  • 70% of imports of rare earths for the U.S. come from China: The U.S. is import-reliant on over 15 critical minerals, which the administration believes to be a threat in case other nations try to weaponize mineral supply chains.

4. NIO Posts Another Mixed Bag

Electric vehicle manufacturer NIO (NIO -2.35%) released Q4 earnings before the opening bell, with the net loss unexpectedly widening despite revenue rising 15% versus a year earlier. In several ways this mirrors last quarter's performance.

  • Shaking hands with the world's largest battery manufacturer: The recent collaboration with Contemporary Amperex Technology should expand the battery-swapping network, enhancing customer convenience.
  • Q4 deliveries up 45.2% versus last year: The new ONVO model made up 19,929 vehicles of the total 72,689, which will give investors some optimism going forward, with the vehicle margin rising to 13.1% versus 11.9% from Q4 2023.

5. What You Might've Missed on Thursday

Stock Advisor recommendation FedEx (FDX -1.79%) fell over 7% in after-hours trading after missing earnings per share expectations and lowering the full-year profit and revenue guidance.

  • "Our revised earnings outlook reflects continued weakness and uncertainty in the U.S. industrial economy": CFO John Dietrich spoke of continued soft demand for services, with worries about the impact of tariffs.
  • "We expect record quarterly revenue in fiscal Q3": Micron Technology (MU -2.28%) gave an upbeat outlook, with a new 1-gamma DRAM node announced, reinforcing its technology leadership. Like Nike, the stock fell after an initial spike after hours.

6. Foolish Fun

Nike is up just 8% over the last 5 years. Across the same period, the S&P 500 is up 145%.

Will Nike be a market-beater over the next 5 years? Debate with friends and family, or become a member to hear what your fellow Fools are saying.