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Nike Digital revenues decline in Q4; annual revenue hits new high

The year ended positively for Nike Inc. despite a year-over-year decline in quarterly revenue and digital sales in the fourth quarter of fiscal 2024.

While fourth-quarter sales declined about 2% compared to the same period last year, Nike’s annual sales reached a new high in fiscal 2024.

In a conference call with investors, Chief Financial Officer Matthew Friend attributed the decline in Nike’s digital sales to “weaker customer traffic, stronger promotions and lower sales of certain classic footwear brands.”

Although Nike Digital has grown at a compound annual growth rate (CAGR) of about 26% since the retailer’s fiscal 2019, the company missed its targets in the fourth quarter, according to Friend. Nike Digital sales were “below average” in April and May and continued in June, he noted. This is because Nike continues to “drive retail sales growth at a high level of full-price realization,” Friend added.

Friend said in the third-quarter conference call that Nike’s goal is to “reach the 40 percent mark for digital sales.” So far, Nike has not disclosed how far the company is on its way to achieving that share of sales through digital channels.

In the quarterly earnings call, President and CEO John Donahoe said Nike is “facing our challenges and regaining our superiority.”

Nike ranks 8th in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers by online sales. It is also the highest-rated apparel/accessories retailer in the Top 1000.

Nike’s total revenue in fiscal year 2024

For the full fiscal year 2024, Nike’s revenue was $51.4 billion, up 1% from the previous year ($51.2 billion). Full-year revenue growth is possible despite a 2% year-over-year decline in Nike’s fourth-quarter revenue to $12.6 billion.

With the exception of the first year of the COVID-19 pandemic in 2020, Nike has increased its annual sales every year since 2011.

Nike’s total revenue fell to about $12.61 billion in the fourth quarter ended May 31, 2024, down from about $12.83 billion in the year-ago period. This is the fourth year-over-year quarterly revenue decline for Nike since the retailer’s first quarter of fiscal 2019.

This is the third such decline in the retailer’s fourth quarter during this period – the first of which occurred at the start of the COVID-19 pandemic in 2020. Moreover, the fourth quarter of 2021 rebounded, outperforming the same period in the previous two years.

The only non-fourth-quarter decline in the last five years was the first quarter of fiscal 2021, although the decline was modest (less than $100 million) compared to the fourth quarter of fiscal 2020 decline of about $4 billion. This was the second quarter impacted by the pandemic.

Prior to the fourth quarter of this year, Nike’s last year-over-year sales decline occurred in the fourth quarter of fiscal 2022.

Sales of Nike’s namesake brand accounted for $12.1 billion of the company’s $12.6 billion in total cross-brand sales, which also include the Jordan and Converse brands.

Nike Digital sales decline again in Q4

Nike Digital, which includes global sales through the retailer’s website and mobile app, declined 10% in the fourth quarter. This follows a 4% year-over-year decline in Nike Digital sales in the third quarter.

Likewise, Nike Direct revenue fell 8% year-over-year to $5.1 billion. Nike Direct refers to the retailer’s direct-to-consumer sales, both in physical stores and online. On the other hand, Nike’s wholesale revenue rose 5% year-over-year to $7.1 billion in the fourth quarter.

In North America, Nike digital sales fell 11% in Q4. Nike store sales fell 5%, while wholesale sales in the region grew 6%.

In Europe, the Middle East and Africa (EMEA), Nike digital sales declined 14% in the fourth quarter. In the Asia Pacific and Latin America (APLA) region, Nike digital sales also declined, declining 12% while wholesale grew 9%. However, Nike digital sales in Greater China increased 8% in the quarter; wholesale grew 15% while in-store sales declined 6%.

Nike outlook for fiscal year 2025

Nike expects revenue to decline by about 10% in the first quarter of fiscal 2025, Friend said. This includes lower digital growth at Nike, “particularly in the first half of the year due to lower traffic and fewer product launches.”

“This reflects more aggressive actions in managing our classic footwear franchises, ongoing challenges at Nike Digital, subdued wholesale order books with new arrivals not yet reaching required levels, weaker Greater China guidance and a number of quarter-specific timing factors,” he said.

Due to rounding, percentages may not exactly match dollar amounts. Check back later for more earnings reports. Here’s Nike’s report from last quarter.

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