Nike warned Thursday that its revenue in the first half of fiscal 2025 will decline by “low single digits” as the world’s largest sporting goods maker cuts franchises to save costs.
Nike’s warning came after the market closed, and shares fell about 6% in aftermarket trading. Executives acknowledged that Nike’s direct-to-consumer strategy wasn’t driving growth as expected and that the company was losing ground in the running category.
In December, Nike outlined a $2 billion savings plan that included reducing its supply of underperforming products and improving its supply chain.
In a conference call Thursday after the earnings release, Nike Chief Financial Officer Matthew Friend told investors that the company was reducing orders for “classic” shoes like the Air Force 1, as well as its current Pegasus Running sneakers . has shifted his focus to upcoming launches and new product development.
Nike beat Wall Street estimates for third-quarter revenue and profit, buoyed by holiday discounts and the launch of new sneakers.
The company maintained its revenue growth forecast of 1% for fiscal 2024.
The company’s quarterly profit of 77 cents per share beat estimates of 74 cents due to staff cuts and a cost-cutting plan.
Source: Terra
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