The world's largest sportswear company, Nike, saw its stock price plunge about 12% in after-hours trading following continued weak performance.
On the 27th (local time) after market close, Nike announced its fiscal year 2024 Q4 (March-May) results, reporting quarterly revenue of $12.606 billion, down 1.7% year-over-year. This was below market expectations of $12.97 billion. Sales through its website, applications (apps), and offline stores fell by 8%. Nike's subsidiary Converse experienced an 18% sharp decline in sales due to sluggish demand in North America and Western Europe. Quarterly earnings per share (EPS) were $1.01, exceeding both last year's EPS of $0.66 and market expectations of $0.84.
Full fiscal year 2024 revenue grew by only 1%. The Wall Street Journal (WSJ) described this as "the worst performance in 20 years, excluding the first year of the COVID-19 pandemic and the 2008-2009 financial crisis."
Nike has struggled amid slowing growth. Smaller competitors such as Brooks, Hoka, and Asics have emerged as rivals, and American consumers' wallets have thinned due to high inflation. While the S&P 500 index has risen about 16% so far this year, Nike's stock price has fallen approximately 13% during the same period.
As it became clear that Nike's recent results did not signal a turnaround, the stock price plunged an additional 12% in after-hours trading. This marks the largest drop since December 22 last year, when Nike announced $2 billion in cost-cutting measures.
Nike forecasted continued weakness in sales for fiscal year 2025 Q1 (June-August). The company plans to respond by strengthening new product launches and diversifying sales channels.
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