Nike's Q4 Revenue Declines, Warns of Lower Guidance for FY2025, Shares Drop Over 10% After Hours

For the fourth quarter ending May 31, Nike's revenue fell 1.7% year-over-year, while analysts had expected a slight increase. Nike's sales for fiscal 2024 are flat compared to the previous year, marking the slowest annual growth rate since 2010, excluding the pandemic period.

Nike warned that it continues to face challenges and will lower its guidance for fiscal 2025. Executives on the earnings call predicted that first-quarter revenue would decline by about 10%.

Revenue Shortfall: Nike reported 4Q revenue of $12.61 billion, missing the estimated $12.86 billion and marking a 1.7% year-over-year decline.
North America: Revenue was $5.28 billion, down 1.4% year-over-year and lower than the $5.44 billion estimate.
EMEA: Revenue in the Europe, Middle East, and Africa region totaled $3.29 billion, a 1.7% decline from last year and slightly below the $3.31 billion estimate.
Greater China Performance: Revenue increased by 2.9% year-over-year to $1.86 billion, surpassing the $1.83 billion estimate.
Asia Pacific & Latin America: Revenue rose by 0.5% year-over-year to $1.71 billion, slightly missing the $1.74 billion estimate.
Global Brands: Revenue fell 21% to $11 million, short of the $13.2 million estimate.
Converse: Revenue decreased by 18% to $480 million, missing the $545.6 million estimate.
Footwear Segment: Revenue was $8.24 billion, down 3.6% year-over-year and below the $8.64 billion estimate.
Apparel Segment: Revenue increased by 2.8% to $3.32 billion, exceeding the $3.25 billion estimate.
Equipment Segment: Revenue surged by 34% to $578 million, well above the $446.4 million estimate.
EPS Growth: Earnings per share were 99 cents, up from 66 cents year-over-year.
Gross Margin: Improved to 44.7%, compared to 43.6% last year but short of the 45.3% estimate.
Inventory Levels: Inventory decreased by 11% year-over-year to $7.52 billion, lower than the estimated $7.99 billion.
North America EBIT: Earnings before interest and taxes were $1.46 billion, a 5.2% increase year-over-year but below the $1.6 billion estimate.
EMEA EBIT: EBIT of $797 million, up 2% from last year, fell short of the $825.9 million estimate.
Greater China EBIT: EBIT increased by 3.6% to $548 million, marginally below the $552.6 million estimate.
Asia Pacific & Latin America EBIT: EBIT rose by 3.7% to $479 million, below the $496.4 million estimate.
Effective Tax Rate: Reduced to 13.1% from 17.3% last year, lower than the 20.6% estimate.
Cash Holdings: Cash and cash equivalents rose by 33% year-over-year to $9.86 billion, above the $9 billion estimate.