Nike shares dropped on Thursday after the company reported weaker than expected sales in its fourth quarter.
The sportswear giant’s fourth quarter revenues hit $12.6bn (£9.6bn) down 2% and its direct-to-consumer sales fell 8% to $5.1bn (£4.3bn). Revenues for the Converse brand were down 18%, due to declines in North America and Western Europe.
The announcement led to shares dropping more than 12%.
Nike president and CEO John Donahoe said the company was addressing these near-term challenges “head on” and “moving at the pace of the consumer and growing the complete marketplace.”
-
Related Story
-
Chief financial officer Matthew Friend said its fourth-quarter results “highlighted challenges” that prompted it to reassess its fiscal 2025 outlook.
“We are taking actions to reposition Nike to be more competitive, and to drive sustainable, profitable long-term growth,” Friend said.
As a result, the business is forecasting revenue will be down in the mid-single digits for the year.
For the current quarter, Nike expects sales to decline by 10% due to a slowdown in its Chinese market and waning consumer demand around the world.
The sporting retailer has been the subject of a strategic overhaul and a $2bn (£1.5bn) cost-saving initiative unveiled in December, which saw plans to simplify the product offer and increase automation.
Nike’s recent performance reflects increased competition from emerging brands such as Hoka and On, which have been gaining market share, particularly in the wholesale running segment.
At the start of the year, Nike revealed it would cut nearly 2% of its total workforce in an effort to reduce costs after reporting “softer” sales.
Click here to sign up to Retail Gazette‘s free daily email newsletter
