Nike is set to report earnings after the bell. Here's what Wall Street expects

Nike is expected to report a steep decline in quarterly profit and flat sales on Tuesday as the sneaker giant continues to work through a colossal turnaround under CEO Elliott Hill. 

About a year and a half into his tenure, Hill has made strides in repairing parts of the business, but has been clear that it'll take time for the entire company to improve given the retailer's scale and complexity. 

When reporting fiscal second-quarter results in December, Nike said sales rose 9% in North America, its largest market. But the good news was overshadowed by a steep decline in China, where revenue fell 17%. 

Throughout the turnaround, the company has warned that progress would not be linear and some parts of the business would improve faster than others, making it difficult for investors to gauge how long recovery will take. 

Nike's turnaround attempt was already coming at a tough time as a global trade war dented its efforts to improve profitability and drive sales from inflation-weary shoppers. But now the athletic company will have to contend with a new war in the Middle East that's already led to rising gas prices and is expected to push consumer prices even higher, which could push shoppers to cut back on nice-to-haves like new clothes and shoes to save money elsewhere. 

On the bright side, Nike will benefit from a range of major sporting events, including the Winter Olympics recently held in the Milan area and the World Cup, happening in North America this summer. 

Given its position in the sports world, Nike is expected to benefit from the events, but perhaps not as much as peers Adidas and Puma, Third Bridge analyst Patrick Ricciardi said in an emailed note. 

Nike is expected to provide its financial guidance during a conference call with analysts at 5 p.m. ET, where investors will be looking out for any updates on its turnaround plan, its current quarter outlook and any color on the fiscal year ahead. 

Here's what analysts are expecting from the world's largest sneaker company, according to consensus estimates from LSEG:

Another key area of focus for investors will be progress in North America during the the company's holiday quarter, its busiest season of the year. Last quarter, Nike saw gains in the region, but some investors wondered whether consumers had pulled forward purchases due to tariffs and whether outsized gains in wholesale revenue were sustainable as the retailer repairs relationships with key partners.