Nike collapses on Wall Street

(Boursier.com) — Nike slipped 12.4% yesterday evening after the market closed on Wall Street. The sports shoe giant delivered annual forecasts that were lower than market expectations. The group posted revenues for the fiscal fourth quarter down 1.7% to $12.6 billion, 2% below the consensus, with notable weakness at Converse, whose revenues fell 18% due to a pronounced slowdown in North America and Western Europe. Revenues in China, at $1.86 billion, however, exceeded expectations. Quarterly adjusted earnings per share were also better than expected, at $1.01, compared to 85 cents in consensus and 66 cents a year earlier. Gross margin increased to 44.7% from 43.6% a year earlier, but missed the consensus of 45.3%.

The group, which also owns the Jordan brand, expects revenues to decline by mid-single digits for the current fiscal year, while analysts had expected growth of 2% on average! Nike executives have blamed the slowdown in part on lifestyle brands, including Air Force 1 and Nike Dunks, which generate a high proportion of their sales online. The decline in activity could even reach 10% in the first fiscal quarter of 2025 alone, which has just begun. Nike had previously expected sales growth in 2025. “Fiscal 2025 will be a transition year for our company,” Nike CEO John Donahoe said last night during the company’s earnings call. “We expect significant, sequential improvement in the second half compared to the first half, and that starts with the confidence we have in the new products we are bringing to market,” added Matthew Friend, Nike’s chief financial officer.