Companies

Nike reports weak first quarter ahead of CEO change

Oct 3, 2024 United States

The US-based sportswear giant has reported a sharp fall in revenue and profits in the first quarter of its current fiscal year, ahead of the forthcoming CEO change

“Nike’s first quarter results largely met our expectations. A comeback at this scale takes time, but we see early wins — from momentum in key sports to accelerating our pace of newness and innovation”, said Matthew Friend, Executive Vice President and Chief Financial Officer of the company. “Our teams are energized as Elliott Hill returns to lead Nike’s next stage of growth”, he concluded.

First Quarter Results

In the first quarter of fiscal 2025, which ended on the 31^st of August, Nike’s revenue amounted to 11.6 billion US dollars, a decrease of 10% on a reported basis and 9% on a currency-neutral basis, as compared to the same period of last year.

Nike brand sales declined in all regions, resulting in a first quarter revenue of 11.1 billion US dollars, down by 10% on a reported basis and 9% on a currency-neutral basis, against the same quarter of fiscal 2025.

In particular, the negative performance of the digital channel (down by 20%), only partially offset by a 1% increase in the brand’s stores, resulted in Nike’s direct revenue declining by 13% on a reported basis and by 12% on a currency-neutral basis to 4.7 billion US dollars. The wholesale channel revenue decreased by 8% on a reported basis and by 7% on a currency-neutral basis.

Similarly, Converse’s revenue totalled 501 million US dollars in the first quarter of the current fiscal year, down by 15% on a reported basis and by 14% on a currency-neutral basis, as compared to the same period of the previous fiscal year.

In the three months ended on the 31^st of August, the company’s gross margin increased by 120 basis points year-on-year to 45.4%, mainly due to lower Nike brand product costs, lower warehousing and logistics costs, and benefits from strategic pricing actions from the prior year.

Ultimately, in the first quarter of fiscal 2025, Nike’s net income was 1.1 billion US dollars, a decline of 28% as compared to the same period of last year, and diluted earnings per share were 0.70 US dollars, a decline of 26% as compared to the same period of last year.

Image Credits: nike.com

United States Companies Footwear Nike Quarter Results Results Sportswear