Nike said it now expects revenue to drop this fiscal year as it cut its outlook amid lower traffic trends and worsening macroeconomic conditions in China.
Shares of the sneaker and apparel company fall 12%, to $83, in after-hours trading. The stock has declined 13% since the beginning of the year.
Nike on Thursday said it no longer expects to report revenue growth for the fiscal year ending in May 2025, and guided for revenue to be down in the mid-single digits. Analysts polled by FactSet anticipate revenue growth of 1.4%, to $52.11 billion.
The company, which had most recently guided for a drop in first-half revenue in the low-single digits, said it now anticipates a decline in the high-single digits.
For the first quarter, Nike forecasts a drop in revenue of about 10%. Wall Street had forecast a drop of 2.8%, to $12.57 billion, in the quarter.
Nike is focused on taking back market share with a strong pipeline of innovation, but this product transition will take some time, executives said.
The company’s outlook comes amid views for an uneven consumer trends in the European, Middle East and Africa region, lower growth in its Nike digital business, and planned declines of classic footwear franchises given fourth-quarter trends, Finance Chief Matthew Friend said on a call with analysts.
“Although the next few quarters will be challenging, we are confident that we are repositioning Nike to be more competitive with a more balanced portfolio to drive sustainable, profitable, long-term growth,” Friend said.
The lowered guidance follows a missed plan for the fiscal fourth quarter on softer traffic, higher promotions, and lower sales of certain classic footwear franchises, Friend said.