Nike’s fourth-quarter revenue fell by 2% to $12.6 billion, missing the $12.84 billion expected by analysts. However, net income increased by 45% to $1.5 billion, with diluted earnings per share at 99 cents, surpassing the expected 83 cents per share, despite a 2-cent loss from restructuring charges.
Chief Financial Officer Matthew Friend acknowledged the quarter’s “challenges,” leading to a revised outlook for fiscal year 2025. CEO John Donahoe attributed the guidance cut to weakened lifestyle sales and macroeconomic uncertainties. Nike now expects mid-single-digit revenue declines for fiscal year 2025, with Q1 revenue projected to drop by 10% due to muted wholesale orders and a softer outlook in China.
Following the report, Nike shares fell over 5%t in after-hours trading.
Brand-wise, Nike revenues dropped 1% to $12.1 billion, with growth in Greater China, APLA, and EMEA offset by declines in North America. Converse sales fell 18% to $480 million. Direct revenues decreased by 8% to $5.1 billion, while wholesale revenues rose 5 percent to $7.1 billion.
Market concerns about Nike’s performance persist as the company struggles in key segments like running. In December, Nike announced cost-saving measures, including layoffs and increased automation, aiming to save up to $2 billion over three years. The company also unveiled a new innovation pipeline following criticism over its lack of new products.
Nike’s “Consumer Direct Acceleration” (CDA) program, launched in June 2020, has faced skepticism, with a recent lawsuit alleging executives misled investors about its success.
For fiscal year 2024, Nike reported a 1% increase in both direct and wholesale sales. Overall, revenues reached $51.4 billion, with net income up 12% to $5.7 billion and diluted earnings per share at $3.73, including 22 cents from restructuring charges.
In conclusion, despite current challenges, Nike’s focus on innovation, direct-to-consumer strategies, and organizational streamlining positions the company for future growth.
Financial Summary
| Financial Metric | Q4 2024 | Analysts’ Expectations | FY 2024 |
|---|---|---|---|
| Revenue | $12.6 billion (down 2%) | $12.84 billion | $51.4 billion (up 1%) |
| Net Income | $1.5 billion (up 45%) | N/A | $5.7 billion (up 12%) |
| Diluted Earnings per Share | 99 cents | 83 cents | $3.73 |
| Restructuring Charges Impact | 2 cents loss per share | N/A | 22 cents |
| Nike Brand Revenue | $12.1 billion (down 1%) | N/A | N/A |
| Converse Brand Revenue | $480 million (down 18%) | N/A | N/A |
| Direct Revenues | $5.1 billion (down 8%) | N/A | N/A |
| Wholesale Revenues | $7.1 billion (up 5%) | N/A | N/A |
| Q1 2025 Revenue Projection | Down 10% | N/A | N/A |
| FY 2025 Revenue Projection | Mid-single-digit decline | N/A | N/A |
