Nike shares fall after company forecasts bigger-than-expected sales decline in 2025

Nike (NKE) stock fell nearly 14% on Friday in early pre-market trading after the retailer said it expects revenue to decline more than previously thought next year.

The company said Thursday that it expects revenue to fall to mid-single digits in 2025, including an expected 10% decline in the first quarter. Nike had initially projected growth in overall sales in 2025.

The guidance reflects a continuing trend from Nike’s fiscal 2024 fourth quarter, which the shoemaker announced after the closing bell on Thursday. The company said quarterly revenue in the fourth quarter fell 2% from a year earlier to $12.61 billion, below Wall Street estimates of $12.86 billion. Meanwhile, Nike’s earnings of $0.99 per share beat analysts’ expectations of $0.66. Nike’s direct-to-consumer sales fell 8% from the same quarter last year to $5.1 billion.

“Finance [2025] “It’s going to be a transitional year for our business,” Nike CEO John Donahue said during the company’s earnings call.

The company is trying to reignite sales growth in what has been a lackluster year for the stock so far. David Swartz, an equity analyst at Morningstar, told Yahoo Finance that the sales number was “very weak” and was the main concern with the release.

Nike’s gross profit margins rose to 44.7% in the fourth quarter, compared with 43.6% in the year-ago period, but fell short of analysts’ expectations of 45.3%.

The company’s stock entered the issue down more than 17% over the past year, a far cry from the S&P 500 (^GSPC)’s 26% gain, as investors grew wary of slowing growth at retailers.

“Overall, this industry leader is still surprisingly struggling, and we believe investors’ patience with management is wearing thin by the day,” Tom Nikic, Wedbush’s senior vice president of equity research, wrote in a note following the earnings announcement. . “Long term, NKE has been one of the most successful growth stories in our coverage, and we continue to wait for the brand to regain its lustre. But it looks like we will have to wait a while longer.”

Wall Street is closely watching Nike’s product pipeline as the Oregon-based company works to fend off competition in the core sneaker market from rivals like Adidas (ADDYY) and relative upstarts like On (ONON) and Deckers (DECK) Hoka brand.

Nike executives said they believe their plans to expand new products are on track and will impact the company’s financials by the end of the year.

The story continues

“We’re planning for substantial, sequential improvements in the second half compared to the first half, and that starts with the confidence we have around the new products we’re bringing to market,” Matthew Friend, Nike’s chief financial officer, said on the earnings call.

Josh Schaffer is a reporter at Yahoo Finance. You can follow him on X @_Joshshafer.

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