Nike shares tank over 12% in after-hours trading after disappointing FY25 guidance

Shares of Nike fell over 12% in post market hours trading after the company provided weak guidance for the fiscal year 2025.

Nike said it expects fiscal 2025 reported revenue to be down mid single-digits, with the first half down high single-digits. Foreign exchange headwinds have also worsened, it said. The company also indicated it expects first-quarter revenue to be down approximately 10%.

The firm’s fourth quarter revenues stood at $12.6 billion, down 2% on a reported basis and flat on a currency-neutral basis. Net profit stood at $1.5 billion, up 45% while diluted earnings per share came in at $0.99.

Nike Direct revenues stood at $5.1 billion, down 8% on a reported basis and down 7% on a currency-neutral basis, due to declines in NIKE Brand Digital of 10% and NIKE-owned stores of 2%. Wholesale revenues for the fourth quarter came in at $7.1 billion, up 5% on a reported basis and up 8% on a currency-neutral basis.

The company said gross margin rose 110 basis points to 44.7%, primarily due to strategic pricing actions, lower ocean freight rates and logistics costs, and lower warehousing, partially offset by lower margin in Nike Direct and unfavorable changes in net foreign currency exchange rates.

For the full fiscal year 2024, net income stood at $5.7 billion, up 12% while diluted earnings per share came in at $3.73.

Matthew Friend, executive vice president and chief financial officer at Nike said the firm is driving better balance across its portfolio. “While we are encouraged by our progress, our fourth quarter results highlighted challenges that have led us to update our fiscal 2025 outlook. We are taking actions to reposition Nike to be more competitive, and to drive sustainable, profitable long-term growth,” he said.

In the fourth quarter, the company returned approximately $1.6 billion to shareholders, including dividends of $560 million.

Shares of the company have declined by nearly 12% since the beginning of the year. The stock has lost over 16% in the last one year.