Revenue Decline Forecast

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Nike {{ m-tag option="price" ticker="NKE" currency="USD" }} stock fell as much as 11% Thursday in after-hours trading after the retailer said it expects revenue to decline more than previously thought in the coming year. The company said it expects revenue to fall mid-single digits in 2025, including an expected 10% decline in the first quarter.
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The company said quarterly revenue in the fourth quarter fell 2% from the year prior to $12.61 billion, below Wall Street's estimates for $12.86 billion. Meanwhile, Nike's $0.99 earnings per share exceeded analysts' expectations of $0.66. Nike's direct-to-consumer sales declined 8% from the same quarter a year ago to $5.1 billion.

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Transition Year

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"Fiscal (2025) will be a transition year for our business,  CEO John Donahoe said during the company's earnings call.
Nike's gross margins increased to 44.7% in the fourth quarter, up from 43.6% in the same period a year ago, but came in below analyst expectations of 45.3%.

The company's stock entered the release down more than 17% over the last year, a far cry from the S&P 500's 26% gain.

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New Product Pipeline
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Nike executives stressed that they believe their plans to scale new products are on "track" and will impact the company's financials by the end of the year.
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"We are planning for meaningful, sequential improvement in the second half versus the first half, and it starts with the confidence that we have around the new products that we're bringing to market," Nike CFO Matthew Friend said on the earnings call.

Regional Sales Overview
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Sales in North America, its largest market, came in at $5.28 billion, below StreetAccount expectations of $5.45 billion.
In Europe, Middle East, and Africa, Nike posted revenue of $3.29 billion, compared to estimates of $3.32 billion.
In Asia Pacific and Latin America, Nike saw $1.71 billion in sales, compared to estimates of $1.77 billion. Still, Friend later warned of the "softer outlook" in China and said that had it not been for Chinese marketplace Tmall's early start to the region's 618 shopping holiday, sales in the country would've fallen short of Nike's internal expectations.

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