Time: 2024-06-28
Nike (NYSE:NKE) recently reported its fourth-quarter results, with adjusted earnings of $1.01 per share, surpassing the estimated $0.85. However, revenue of $12.61 billion fell short of the estimated $12.86 billion. Morningstar senior equity analyst David Swartz believes that the revenue miss caused shares to drop in after-hours trading. Despite slightly better-than-expected revenue numbers in China, Swartz notes that Nike's sales recovery in the country is slower than anticipated.
The greater China numbers for Nike were slightly below expectations, leading to concerns about the company's performance in the region. Nike aims to reignite sales growth through new product launches, but the impact may not be felt until late into fiscal 2025. The company's focus on product innovation and marketing events, such as the Olympics and other major sporting events, is expected to drive future sales growth.
Nike recently cut its full-year guidance, expecting sales to decline by 10% in the current quarter. The company anticipates fiscal 2025 sales to be down in the mid-single digits, compared to previous expectations of growth. The finance chief, Matthew Friend, highlighted challenges in sales, particularly in China and global consumer trends. Nike's slower online sales, decline in classic footwear franchises, and macroeconomic uncertainty in Greater China are contributing factors to the revised outlook.
Despite beating earnings estimates in the fiscal fourth quarter, Nike fell short on revenue. The company reported adjusted earnings per share of $1.01, exceeding the expected 83 cents, while revenue of $12.61 billion missed the $12.84 billion estimate. Following the announcement, Nike's shares plunged approximately 11% in extended trading. The company's net income for the quarter was $1.5 billion, or 99 cents per share, compared to $1.03 billion, or 66 cents per share, a year earlier. Sales for the period dropped to $12.61 billion, down 2% from the previous year.
Nike executives attributed the sales miss to various factors, including a decline in the lifestyle business and weaker online sales in April and May. Despite challenges, sales in China exceeded expectations, while North America and Europe saw a slight decline. Looking ahead, Nike faces the task of revitalizing sales growth through product innovation and strategic marketing efforts.
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