Nike NKE.N on Tuesday reported quarterly revenue that edged past estimates, as the world’s largest sportswear company tries to draw back shoppers and reassure investors that its turnaround push is working.
The company reported fourth-quarter revenue of $10.97 billion, compared with analysts’ average estimate of $10.86 billion, according to data compiled by LSEG.
Nike CEO Elliott Hill, who took the helm of the company in 2024, vowed to refocus Nike on key sports like soccer and running. He has also aimed to rebuild relationships with wholesale retailers, many of which had been severed as part of former CEO John Donahoe’s pivot to a direct-to-consumer model.
But Wall Street investors have grown increasingly impatient with Hill’s nearly two-year turnaround effort, as Nike struggles to clear out excess inventory and revamp product innovation.
Nike’s shares have fallen 35 per cent so far this year, but were up about 2 per cent in extended trading.
The company’s turnaround push has also run into an increasingly tough macroeconomic environment due to tariffs and the war in Iran, and its efforts to clear out its older lifestyle-focused inventory have been a drag on margins.
Against the backdrop of a persistent sales slump, the sportswear giant has invested heavily in marketing ahead of the World Cup this year to boost revenue and brand visibility - and to help compete with rivals like Adidas.
The company reported earnings per share of 72 cents for the fourth quarter, which included a 52 cent benefit related to the expected recovery of import tariffs.
Nike is also looking to improve its product line-up in China by reducing selling. Sales fell 17 per cent in the region on a constant currency basis, compared with a 10 per cent drop in the previous quarter, and a 20 per cent drop that Nike had projected in March.
Greater China accounts for 15 per cent of annual sales and is Nike’s third-largest market, after North America and EMEA. But weaker product assortments and share losses to local competitors Anta 2020.HK and Li Ning 2331.HK have dampened sales in the region in recent quarters.
Reporting by Juveria Tabassum in Bengaluru and Danielle Kaye in New York; Editing by Maju Samuel
