Nike forecasts revenue decline due to competition, weak demand, plans to boost sales, neutral.

From Investing.com: 2024-06-27 21:35:59

Nike’s fiscal 2025 revenue forecasted to decline due to waning demand for sneakers. The brand expects a mid-single-digit percentage fall in revenue with shares dropping over 12% after hours. Efforts to boost sales through direct-to-consumer channel unsuccessful. The company faces market share loss to brands like On and Hoka.

Nike aims to revive sales by cutting back on oversupplied brands, investing in better running shoes, and launching new products like the Air Max line. The company hopes the Olympics will help regain market share. GlobalData analyst Neil Saunders suggests Nike may be in trouble despite reinvention efforts.

In response to softer traffic in North America, Nike plans to offer footwear below $100 to attract price-conscious customers. US market share in sports footwear category fell to 34.97% in 2023 from 35.37% in 2022. Weak demand in international markets, including China, is also impacting sales.

Leading up to the Olympics, Nike is emphasizing its commitment to pure sport and breakthrough innovation. CEO John Donahoe said the brand is focusing on serving the athlete and putting sport back at the center of its strategy. Despite challenges, revenue in Nike’s wholesale business rose 5%.

Nike reported a 1.7% decrease in fourth-quarter net revenue, falling short of estimates at $12.61 billion. The company’s $2 billion cost savings plan, including layoffs, helped achieve adjusted earnings of $1.01, exceeding estimates. For the first quarter, Nike predicts a roughly 10% decrease in revenue, compared to expectations of 3.16% fall.



Read more at Investing.com: Nike forecasts surprise revenue fall as upstarts steal marketshare; stock dives By Reuters