Shares of Nike (NKE) are down 15% after the sneaker giant posted mixed quarterly financial results and lowered its full-year guidance.
The Beaverton, Oregon-based company reported earnings per share (EPS) of $1.01 U.S. versus $0.83 U.S. that was expected among analysts.
Revenue for what was the company’s fiscal fourth quarter totaled $12.61 billion U.S. compared to $12.84 billion U.S. that was forecast. Sales were down 2% from a year earlier.
For all of fiscal 2024, Nike posted sales of $51.36 billion U.S., which were flat compared to the previous year. It was the slowest pace of annual sales growth since 2010.
The company also announced that it expects sales to drop 10% for its 2025 fiscal year due to soft sales in China and what executives called “uneven” consumer trends.
Nike previously expected sales to grow in its fiscal 2025 year.
On an earnings call with media and analysts, Nike’s management team said they continue to struggle with slower online sales, declines in classic footwear franchises, and ongoing sluggishness in China.
Notably, Nike said sales in China declined across all channels due to macro conditions in the nation of 1.4 billion people.
Sales in North America, Nike’s biggest market, came in at $5.28 billion U.S., below forecasts of $5.45 billion U.S.
In Europe, Middle East and Africa, Nike posted revenue of $3.29 billion U.S., which was also below estimates of $3.32 billion U.S.
In Asia and Latin America, Nike’s quarterly sales of $1.71 billion U.S. missed targets of $1.77 billion U.S.
In recent quarters, Nike has been working to shift course from a failed strategy that had seen the company try and drive sales through its own website and branded stores rather than through wholesalers and third-party retailers such as Foot Locker (FL).
During the quarter, Nike’s direct revenues fell 8% from a year earlier. Meanwhile, wholesale revenue rose 5%, reflecting Nike’s move away from its previous direct sales strategy.
Nike is also in the process of cutting costs by $2 billion U.S. over the next three years.
Before today (June 28), the stock of Nike had declined 12% on the year and was trading at $94.19 U.S. per share.
