Nike Inc (NYSE: NKE) stock dropped some 20%, to $75.24, in Friday’s deal after it downgraded guidance for the 2025 financial year, amidst ‘mixed’ fourth-quarter financials.
The downgraded outlook comes due to softer consumer demand in North America and China.
Nike told investors that it expects full-year revenue to drop by mid-single digits next year, with its first-quarter revenue seen down about 10% – this compares to a market forecast of a 3% decline. Analysts had projected a roughly 3% decline.
The sportswear brand plans to invest $1 billion in consumer-facing activities and accelerate product creation through its new “Speed Lane” which is described as a streamlining of production.
For its fourth quarter, Nike reported adjusted earnings of $1.01 per share on $12.6 billion in revenue, missing the $12.9 billion revenue forecast by Wall Street analyst consensus. Quarterly sales fell by 2% year over year, notably direct-to-consumer sales were down 8% offset somewhat by a 5% improvement in wholesale.
Nike’s full-year revenue was marked at $51.4 billion, slightly below the $51.6 billion expected by the market.
Analysis of the results highlighted that Nike continued to lose market share to challenger brands like On Holding, New Balance, and Hoka.
“We are taking our near-term challenges head-on, while making continued progress in the areas that matter most to Nike’s future,” chief executive John Donahoe said in a statement.
Matthew Friend, Nike chief financial officer, meanwhile, added: “While we are encouraged by our progress, our fourth quarter results highlighted challenges that have led us to update our Fiscal ’25 outlook.
“We are taking actions to reposition Nike to be more competitive, and to drive sustainable, profitable longterm growth.”
