Nike forecasts surprise revenue fall as upstarts steal marketshare; stock dives
Rewrites to add details from conference call and background
By Ananya Mariam Rajesh and Juveria Tabassum
June 27 (Reuters) -Nike NKE.N on Thursday forecast a surprise drop in fiscal 2025 revenue, hurt by faltering demand for its sneakers as consumers covet newer brands such as On and Hoka, pushing its shares down over 12% after hours.
Nike said it expects a mid-single-digit percentage fall in annual revenue. Analysts expected a 0.91% rise, according to LSEG data. Fourth-quarter revenue also missed estimates.
The company's stock, which has declined 13% so far this year, was set to lose more than $15 billion in market value if the losses hold on Friday.
The Air Jordan maker's efforts to drive more sales through its direct-to-consumer channel, mainly in North America, has been unsuccessful so far, as customers have become pickier about what they spend on. Rival brands On ONON.N and Deckers' Hoka DECK.N have taken away some of Nike's market share with their more fashionable products.
Shares in these two companies also slipped between 1% and 2% in post-market trading.
To stem a worsening decline in sales, Nike has cut back on oversupplied brands such as Air Force 1, poured money into making better running shoes - more cushion under the midfoot to increase stability - and is planning a fresh iteration of the popular Air Max line.
It is also betting that Olympics this year will help it win back some market share by spotlighting performance products such as the Alphafly 3 racer and the Pegasus running shoe.
"Nike is trying to sell a narrative that it's reinventing," said GlobalData analyst Neil Saunders. "But the numbers they have given ... for 2025, really suggest a company that's in a bit of trouble and the things they're doing just are not going to deliver across next year."
In North America, "this quarter we saw softer traffic in our factory stores highlighting increasing pressure being felt by the value consumer," Nike CFO Matthew Friend said on a post-earnings call.
To woo price conscious customers, Nike said it will offer a refreshed lineup of footwear below $100.
Nike's US market share in the sports footwear category in 2023 fell to 34.97% in 2023 from 35.37% in 2022, and 35.40% in 2021, according to GlobalData.
Weak demand in Nike's international markets, including China, is also hurting sales, Friend said. Brick-and-mortar traffic in China during the March-May quarter fell in the double digits.
Greater China accounted for 14.7% of Nike's 2024 revenue; North America made up 42%.
'SERVING THE ATHLETE'
In the run up to Olympics, Nike is touting its roots in pure sport. It said earlier it was spending more on this Olympics than any previous Games.
"The Paris Olympics offers us a pinnacle moment to communicate our vision of sport to the world. This is led by breakthrough innovation and announced by a brand campaign that you won't be able to miss," CEO John Donahoe said on the call.
He said Nike was putting "sport back at the center of everything we do, serving the athlete."
Among bright spots in its earnings reportcard for the fourth quarter, revenue in Nike's wholesale business rose 5%. But growth in its direct-to-consumer business fell 8%.
Fourth-quarter net revenue slipped 1.7% to $12.61 billion falling short of estimates of $12.84 billion.
Nike's $2 billion cost savings plan including layoffs, also helped the company's adjusted earnings of $1.01 top estimates of 83 cents.
For the first quarter, Nike forecast a roughly 10% fall in revenue, compared with expectations of a 3.16% fall.
Reporting by Juveria Tabassum and Ananya Mariam Rajesh in Bengaluru; Editing by Shinjini Ganguli and Sayantani Ghosh
Relaterade tillgångar
Senaste nytt
Ansvarsfriskrivning: XM Group-enheter tillhandahåller sin tjänst enbart för exekvering och tillgången till vår onlinehandelsplattform, som innebär att en person kan se och/eller använda tillgängligt innehåll på eller via webbplatsen, påverkar eller utökar inte detta, vilket inte heller varit avsikten. Denna tillgång och användning omfattas alltid av i) villkor, ii) riskvarningar och iii) fullständig ansvarsfriskrivning. Detta innehåll tillhandahålls därför uteslutande som allmän information. Var framför allt medveten om att innehållet på vår onlinehandelsplattform varken utgör en uppmaning eller ett erbjudande om att ingå några transaktioner på de finansiella marknaderna. Handel på alla finansiella marknader involverar en betydande risk för ditt kapital.
Allt material som publiceras på denna sida är enbart avsett för utbildnings- eller informationssyften och innehåller inte – och ska inte heller anses innehålla – rådgivning och rekommendationer om finansiella frågor, investeringsskatt eller handel, dokumentation av våra handelskurser eller ett erbjudande om, eller en uppmaning till, en transaktion i finansiella instrument eller oönskade finansiella erbjudanden som är riktade till dig.
Tredjepartsinnehåll, liksom innehåll framtaget av XM såsom synpunkter, nyheter, forskningsrön, analyser, kurser, andra uppgifter eller länkar till tredjepartssajter som återfinns på denna webbplats, tillhandahålls i befintligt skick, som allmän marknadskommentar, och utgör ingen investeringsrådgivning. I den mån som något innehåll tolkas som investeringsforskning måste det noteras och accepteras att innehållet varken har varit avsett som oberoende investeringsforskning eller har utarbetats i enlighet med de rättsliga kraven för att främja ett sådant syfte, och därför är att betrakta som marknadskommunikation enligt tillämpliga lagar och föreskrifter. Se till så att du har läst och förstått vårt meddelande om icke-oberoende investeringsforskning och riskvarning om ovannämnda information, som finns här.
