10% Revenue Decline for Nike, Earnings Report Shows
Nike may have brought in over $11 billion for the quarter, but its stock is down after revenue figures show a year-to-year decrease.
After Nike (NKE) released its first fiscal 2025 quarterly earnings report, the company’s stock price dropped 8% on Wednesday, with a dire outlook for the coming year.
The company said its revenue was down 10% compared to its first fiscal quarter for 2024, and they blamed it on declining foot traffic in stores, higher revenues and lower than expected product sales.
The company beat the estimates from Zachs for earnings per share with 70 cents compared to the expected 52 cents. However, the company’s earnings per share declined by 26% compared to the same time last year. That created mixed results for the quarterly report and caused a sharp loss of investor confidence in the brand.
Nike brought in $11.59 billion for the quarter, which was short of the Zachs Consensus Estimate of $11.65 billion. The company anticipated a 10% revenue drop as it was coming close to the earnings report, but that has not helped their stock situation. Nike stock is priced at $83.27, which is a slight improvement from their low yesterday.
Expectations for Nike Stock
The stock was lower in July, dropping to $71, so it has recovered since then. However, Nike stock is likely to dip further and trend downward over the coming weeks. With the stock market stumbling right now and increased tensions in the Middle East, the economic environment is not great for the stock market at the moment.
Nike may pick up by the next earnings report or during the holiday season as sales improve, but before then, we do not expect to see a significant stock price increase.
The company withdrew its guidance for the remainder of the year after the quarterly report. In a statement, Nike’s chief financial officer spoke about the transition to a new CEO and the declining sales and said the company would have to issue new guidance as a result.
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