Nike Reports Smaller Q4 Revenue Decline, Beats Profit Estimates as CEO Emphasizes Sports Innovation
Nike announced a less severe drop in fourth‐quarter revenue than anticipated and exceeded profit expectations, thanks to CEO Elliott Hill’s renewed focus on sports-related product innovation and targeted marketing campaigns.
The athletic brand, facing stiff competition in the running segment, has significantly invested in its running shoe collections—such as the Pegasus and Vomero lines—while strategically discounting older models like the Air Force 1 and Air Jordan 1.
Since Hill took the helm in October last year, the company has reinvigorated its relationships with wholesale partners, broadened its presence across brick-and-mortar retail locations, and resumed selling on Amazon.com after a six-year pause.
In the fourth quarter, the company’s revenue dropped by 12% to $11.10 billion, outperforming analyst expectations of a 14.9% decrease to $10.72 billion, according to industry data.
Under Hill’s “win now” approach, Nike is bolstering its investment in sports-focused marketing to recapture its dominant position as a leading sports brand. As part of these efforts, the company organized a high-profile live event in Paris where sponsored athlete Faith Kipyegon attempted to break the four-minute mile barrier. Although she fell short of that milestone, her performance set a new unofficial standard amidst a backdrop of elite athletes.
The firm reported fourth-quarter earnings per share of 14 cents, surpassing the consensus estimate of 12 cents. However, the company acknowledged challenges in the Chinese market, where tougher economic conditions and increased competition resulted in a 21% decline in sneaker sales during the quarter, following a 17% drop in the preceding period.
Additionally, Nike’s gross margin for the quarter ending May 31 decreased by 440 basis points, after experiencing a 330 basis point reduction in the previous quarter. In after-hours trading, shares dipped 2%, contributing to a year-to-date decline of approximately 19.6%.
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