By
Bloomberg
Published
Jun 28, 2024
Nike Inc. reported quarterly sales that fell short of expectations — adding urgency to the world’s largest sportswear company’s efforts to strengthen ties with its retail partners and speed up its product development.
Revenue fell 1.7% to $12.6 billion for the fiscal fourth quarter ended May 31, missing the average of analyst estimates. Greater China revenue for the quarter was $1.86 billion, beating the average analyst estimate, while earnings per share also surpassed expectations.
Nike shares fell 4.2% at 4:26 p.m. in extended New York trading. The stock has declined 13% this year through Thursday’s close.
Converse, known for its Chuck Taylor sneakers, saw revenue plummet 18% due to soft sales in both North America and Western Europe. The results show the weakness Nike has reported in recent quarters is persisting. Nike Chief Executive Officer John Donahoe is cutting $2 billion in costs and slashing 2% of the workforce, with layoffs recently hitting the company’s European headquarters near Amsterdam and its Boston-based Converse brand.
Nike Chief Financial Officer Matt Friend said that the company will update its outlook for this fiscal year, citing unspecified challenges from the previous quarter.
“We are taking actions to reposition Nike to be more competitive, and to drive sustainable, profitable long-term growth,” Friend said in a statement. Nike traditionally gives its outlook during its call with analysts following the release of results.
Amid a wave of competition from upstarts such as On Holding AG and Deckers Outdoor Corp.’s Hoka running shoes, Donahoe has said he’ll prioritize sports, new products and wholesale partners that had largely recieved less attention from the company as it sought to boost its own stores and websites.