Nike shares fell after the company forecast a larger-than-expected sales decline in 2025

Nike (NKE) stock fell nearly 14% Friday in early premarket trading after the retailer said it expects revenue to fall more than previously thought next year.

The company said Thursday it expects revenue to decline into the single digits in 2025, including an expected 10% decline in the first quarter. Nike had initially guided for overall sales growth in 2025.

The guidance reflects a continuing trend from Nike’s fiscal 2024 fourth quarter, which the shoemaker announced after the closing bell on Thursday. The company said quarterly revenue in the fourth quarter fell 2% from a year earlier to $12.61 billion, below Wall Street estimates of $12.86 billion. Meanwhile, Nike’s earnings of $0.99 per share beat analysts’ expectations of $0.66. Nike’s direct-to-consumer sales fell 8% from the same quarter last year to $5.1 billion.

“Finance [2025] “It will be a transitional year for our business,” Nike CEO John Donahoe said during the company’s earnings call.

The company is trying to rekindle sales growth in what has been a lackluster year for the stock so far. Morningstar equity analyst David Schwartz told Yahoo Finance that the sales figure was “very weak” and was the main concern with the release.

Nike’s gross profit margins rose to 44.7% in the fourth quarter, compared to 43.6% in the same period last year, but were lower than analysts’ expectations of 45.3%.

The company’s stock entered the issue down more than 17% over the past year, a far cry from the S&P 500 (^GSPC)’s 26% gain, as investors grew wary of slowing growth at retailers.

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“Overall, this industry leader is still surprisingly struggling, and we believe investors’ patience with management is wearing thin by the day,” Tom Nikic, Wedbush’s senior vice president of equity research, wrote in a note following the earnings announcement. . “Long term, NKE has been one of the most successful growth stories in our coverage, and we continue to wait for the brand to regain its luster. But it looks like we will have to wait a while longer.”

Wall Street has been closely watching Nike’s product line as the Oregon-based company works to fend off competition in the core athletic shoe market from rivals like Adidas (ADDYY) and relative upstarts like ONON and DECK. Hoka.

Nike executives said they believe their plans to expand new products are on the “right track” and will impact the company’s financials by the end of the year.

“We plan for sequential, meaningful improvement in the second half versus the first half, and that starts with the confidence we have around the new products we bring to market,” Matthew Friend, Nike’s chief financial officer, said on the earnings call.

BOSTON, MA - JUNE 25: Toronto Blue Jays first baseman Vladimir Guerrero Jr. wears a red and white Nike cleat.  (Photo by: Matthew J. Lee/The Boston Globe via Getty Images)

Will innovation boost Nike shares? Nike Toronto Blue Jays 1B Vladimir Guerrero Jr. Red and White Shoe. (Matthew J. Lee/Boston Globe via Getty Images) (The Boston Globe via Getty Images)

Josh Schaffer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.

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