Nike Inc.’s quarterly sales figures failed to meet projections, which made the world’s biggest sportswear company’s attempts to fortify relationships with its retail partners and expedite product development even more pressing.
For the fiscal fourth quarter that concluded on May 31, revenue decreased 1.7% to $12.6 billion, falling short of the average analyst projection. Greater China’s revenue for the quarter came in at $1.86 billion, which was more than the average analyst projection. The region also had higher-than-expected earnings per share.
At 4:26 p.m. in extended New York trade, Nike shares dropped 4.2%. As of Thursday’s closing, the stock had down 13% so far this year.
Converse, best known for its Chuck Taylor sneakers, witnessed an 18,000% decline in revenue as a result of weak sales in Western Europe and North America. The outcomes demonstrate that Nike’s ongoing deterioration matches what has been stated in recent quarters. John Donahoe, the CEO of Nike, is reducing expenses by $2 billion and laying off 2% of the staff. The company’s Converse brand, situated in Boston, and its European headquarters in Amsterdam have also lately seen layoffs.
Citing undisclosed difficulties from the prior quarter, Nike Chief Financial Officer Matt Friend stated that the business will revise its expectations for this fiscal year.
Friend stated in a statement, “We are taking steps to reposition Nike to be more competitive and to drive sustainable, profitable long-term growth.” Nike often shares its prognosis with analysts during the call that comes after the results are announced.
Donahoe has stated that he will give priority to sports, new goods, and wholesale partners that had generally received less attention from the firm as it worked to build its own shops and online. This is in response to a surge of competition from upstarts like On Holding AG and Deckers Outdoor Corp.’s Hoka running shoes.
