Nike’s stock is down 6% after the sneaker maker reported financial results that showed a continued slowdown of its sales in China.
The Eugene, Oregon-based company reported earnings per share (EPS) of $0.77 U.S. compared to $0.74 U.S. that had been expected on Wall Street.
Revenue in the quarter came in at $12.43 billion U.S. versus $12.28 billion U.S. that was estimated among analysts. Sales were up only 0.3% from a year earlier.
In North America, Nike’s sales in the fourth and final quarter of 2023 rose 3% year-over-year to $5.07 billion U.S., beating analyst estimates of $4.75 billion U.S.
However, sales in the rest of Nike’s regions missed targets. In China, sales increased 5% on an annualized basis, but growth has decelerated as that country’s economy struggles.
In Europe, the Middle East and Africa, revenue declined 3% to $3.14 billion U.S., worse than the $3.17 billion U.S. that analysts had expected.
Sales in Asia Pacific and Latin America rose 3% to $1.65 billion U.S., but that result was below the $1.69 billion U.S. that analysts had forecast for Nike.
In terms of forward guidance, Nike reiterated its sales outlook for fiscal 2024 and said that it expects revenue to grow by 1%, in line with expectations.
For the current first quarter of the year, Nike said it expects revenue to be up only slightly compared to Wall Street estimates of 2% growth.
Also, for all of this year, Nike said that it expects gross margins to grow about 1.2 percentage points, below the 1.6 percentage point increase analysts had expected.
Last December, Nike announced a restructuring plan to reduce its costs by $2 billion U.S. over three years. More recently, Nike cut 2% of its global workforce, or about 1,500 jobs.
Prior to today (March 22), Nike’s stock had declined 16% over the last 12 months to trade at $100.82 U.S. per share.
