01:26 PM EDT, 05/20/2025 (MT Newswires) -- Nike's ( NKE ) risk-reward profile looks "unfavorable" heading into its fiscal 2025 results as the athletic footwear and apparel maker faces headwinds from clearance activity, tariffs and macro uncertainty, RBC Capital Markets said Tuesday.

The brokerage projects fourth-quarter earnings at $0.13 a share on sales of $10.60 billion. A year earlier, the company reported EPS of $0.99 on sales of $12.61 billion. Wall Street is looking for $0.11 and $10.70 billion, respectively, according to RBC.

For fiscal 2025, the brokerage expects EPS of $2.15 on sales of $45.82 billion, compared with $3.73 and $51.36 billion, respectively, a year earlier. The Street is modeling $2.13 and $45.89 billion, respectively, RBC said.

"Nike ( NKE ) is in the heavy-lifting stage of inventory clean-up whilst preparing for strong autumn/winter '25 Running launch," analysts Piral Dadhania and Nikolaos Lafioniatis said in a note to clients. "We prefer to wait until marketplace inventories are cleaner and Nike's ( NKE ) revenue growth improves towards flattish."

RBC lowered its price target on the company's stock to $65 from $66, with a sector-perform rating.

Since October 2023, website traffic trends for Nike ( NKE ) have been increasing at a slower pace, compared with Puma and Adidas. However, on an absolute basis, Nike ( NKE ) still registers more visits on a monthly basis, compared with those two, which RBC said is reflective of the company's scale and market share.

Nike ( NKE ) shares were up 1.2% in Tuesday afternoon trade.

Considering ongoing macro volatility and uncertainty around tariffs, Nike ( NKE ) is unlikely to provide guidance for 2026, the analysts said.

After announcing sweeping new import tariffs early in April, US President Donald Trump declared a 90-day pause on certain duties for non-retaliating countries. The US and China recently agreed to suspend most duties on each other's goods for a period of 90 days, while the Trump administration announced a deal with the UK.

For the first quarter, Nike ( NKE ) is likely to post a double-digit percentage revenue drop, RBC said. The company's ongoing franchise management and "aggressive" inventory clearing measures are expected to continue to weigh on first-quarter topline and gross margins given it plans to complete the clearing actions by end of the first half of 2026, Dadhania and Lafioniatis wrote.

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