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Nike revenues fell 2% in Q4, forecast to decline further in 2025

Posted on by Dsen .N
Nike revenues fell 2% in Q4, forecast to decline further in 2025

Fourth-quarter results beat earnings estimates but fell short of revenue expectations. (Joe Raedle/Getty Images)

Global sportswear giant NIKE has released its financial results for the fourth quarter of its fiscal year 2023-2024, as well as its full-year results, which saw revenue growth year-over-year (YoY) compared to 2022-2023, but a 2% quarter-over-quarter decline year-over-year.

Annual revenue increased by just over $100 million compared to 2022-23, reaching $51.36 billion, and gross profit increased 3% to $22.89 billion. These numbers are roughly the same as 2022-2023, but they help paint a picture of the upcoming quarterly issues the brand will face.

Results for the fourth quarter (Q4) were higher than earnings estimates but lower than revenue expectations, mainly due to the company’s cost-cutting actions. Revenues amounted to USD 12.61 billion, while the forecast was around USD 12.84 billion.

These actions are likely to continue into 2025 as the manufacturer anticipates a sales decline in the upcoming first quarter of fiscal year 2024-2025, which the company expects will be driven by a continued decline in direct-to-consumer sales as well as doubts about the upcoming performance of its China operations, one from the brand’s largest markets.

Nike Direct (its DTC business) was generally stagnant in 2023-2024 compared to the previous year, but revenue in particular in the fourth quarter was down 7-8%

Speaking about the challenges ahead, Nike CFO and executive vice president Matthew Friend said, “We are driving better balance across our portfolio. While we are encouraged by our progress, our fourth-quarter results highlighted challenges that have led us to update our guidance (fiscal year 2024-25). We are taking steps to reposition Nike to be more competitive and deliver sustainable, profitable, long-term growth.”

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Nike President and CEO John Donahoe also commented on the areas of the business he sees as a priority in helping the company continue its growth path and avoid being sidelined by setbacks, saying: “We are taking our near-term challenges head-on – we continue to making continuous progress in the areas that matter most to Nike’s future – serving athletes through performance innovation, moving at the pace of the consumer and growing the overall market.

“I am confident that our teams are leveraging our competitive advantages to make a greater impact on our business.”

Nike shares fell nearly 20% on Friday after reporting fourth-quarter results.