Nike exceeds earnings expectations with recovery warning
Nike Inc. reported better-than-expected fiscal fourth-quarter results, with revenue and earnings surpassing Wall Street forecasts. However, the company cautioned that its recovery from recent challenges will not proceed in a straight line. Shares rose in after-hours trading following the announcement.
Nike Inc. released its fiscal fourth-quarter earnings on Thursday, showing revenue of $12.6 billion, which marked a 1% increase from the previous year and topped analyst expectations of $12.11 billion. Adjusted earnings per share came in at 70 cents, beating the anticipated 56 cents. For the full fiscal year, however, revenue dipped 1% to $51.36 billion, reflecting ongoing pressures in the sportswear market.
Breaking down the quarterly figures, Nike Direct sales, which include online and owned-store channels, grew 1% to $5.45 billion. In contrast, wholesale sales fell 2% to $6.7 billion, highlighting uneven demand across distribution channels. CEO John Donahoe commented on the results, stating, "Our fourth quarter results show we are on the right path to deliver long-term, sustainable, and profitable growth."
Despite the positive beat, Donahoe tempered optimism by warning, "Our recovery will not be linear." Looking ahead, Nike projected first-quarter revenue to be flat to slightly down year over year, with NIKE Brand revenue expected to decline in the low-single digits. These guidance figures underscore the company's cautious outlook amid macroeconomic uncertainties and shifting consumer spending patterns.
The earnings report comes as Nike navigates a challenging environment, including inventory management and competition in the athletic apparel sector. Following the announcement, shares of Nike rose about 8% in after-hours trading, signaling investor relief over the earnings surprise despite the forward-looking concerns.