Nike Posts Smaller Q4 Revenue Drop and Beats Earnings Estimates
Reuters – Nike experienced a less severe decline in fourth‐quarter revenue than expected while surpassing profit forecasts, thanks to CEO Elliott Hill’s renewed focus on product innovation and sports-centric marketing.
With increased rivalry in the running segment, the athletic giant has strategically invested in its running shoe lines—including models like Pegasus and Vomero—while reducing its inventory of older styles such as the Air Force 1 and Air Jordan 1 by offering discounts. Under Hill’s leadership, who joined the company in October of last year, Nike has rejuvenated relationships with wholesale partners, expanded its presence in brick-and-mortar retail outlets, and resumed selling on Amazon.com for the first time in six years.
Despite a 12% decrease in Q4 revenue to $11.10 billion, this decline was milder than the anticipated 14.9% drop to $10.72 billion. In line with the “win now” strategy, the company is committing more resources to sports-focused marketing to reclaim its position as a leading sports brand.
In a high-profile event held in a Paris stadium, sponsored athlete Faith Kipyegon attempted to break the four-minute mile barrier. Though she fell short of this milestone, she managed to set an unofficial record while competing alongside other top athletes in a live-streamed showcase.
Nike reported earnings per share of 14 cents for the fourth quarter, beating analysts’ average estimate of 12 cents. However, the company continues to face headwinds in China, where more challenging economic conditions and rising competition have impacted sneaker demand. Sales in China dropped by 21% in the quarter, following a 17% decline in the previous period.
Additionally, the gross margin for the quarter ending May 31 declined by 440 basis points after a 330 basis points decrease in the prior quarter. Following the release of these results, Nike’s shares fell by 2% in after-hours trading, contributing to a 19.6% drop in the stock for the year so far.
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