Nike warned that it would cut its fiscal 2025 guidance as it continues to face challenges in its business.
Last quarter, the company said that it expects revenue and earnings to grow in fiscal 2025 but didn't say by how much. It said that its expecting revenue in the first half of fiscal 2025 to be down low single digits, reflecting"a subdued macro outlook around the world."For the fiscal fourth quarter, the company handily beat earnings estimates as its cost-cutting efforts continue to bear fruit, but Nike fell short on revenue estimates.
Over the last few months, the longtime leader of the sneaker and athletic apparel category has found itself in a rough patch, working to stay ahead of a slew of upstart competitors. Its revenue growth has slowed, it's been criticized for falling behind on innovation and it's in the process of walking back its direct-sales strategy, which failed to produce the results the company had anticipated.
During the quarter, Nike direct revenues came in at $5.1 billion, down 8% compared to the prior year period. Meanwhile, wholesale revenue was up 5% to $7.1 billion, reflecting Nike's change of heart on direct selling.