Nike Shares Plunge Nearly 20% After Lowering Annual Forecasts
The company acknowledged that this year "will be a transitional year" and projected a 10% drop in revenues for the first quarter.
Shares of sportswear and equipment giant Nike plummeted over 19% this Friday after the company published annual results indicating an increase in profits but also anticipating a decline in revenues for the next fiscal quarter.
Nike’s shares on Wall Street fell 19.49% at mid-session, reaching $75.83, and at times, they exceeded a 20% drop. This slump has reduced the U.S. chain’s market value by 30.2% since the beginning of the year, even though it was already down 12.5% at the close of trading on Thursday.
Nike reported net earnings of $5.7 billion for the recently concluded fiscal year, representing an annual increase of 12.4%. However, the company acknowledged that this year “will be a transitional year” and projected a 10% drop in revenues for the first quarter of 2024.
Nike’s revenue reached $51.362 billion, a 0.3% increase from the previous year, despite a 14% decline in Converse sales to $2.082 billion.
Revenue in North America totaled $21.396 billion, down 1%, while it increased by the same proportion in Europe, the Middle East, and Africa to $13.607 billion. Meanwhile, revenue grew by 4% in China to $7.545 billion and by 5% in Asia-Pacific and Latin America to $6.729 billion.
In the fiscal fourth quarter, Nike posted a profit of $1.5 billion, a 45.5% increase from a year ago, while revenues were $12.606 billion, down 1.7%.
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