Beaverton, Oregon – Nike’s stock took a significant hit on Friday, with a nearly 14% drop in pre-market trading following the company’s announcement of an expected decline in revenue for the upcoming year. The athletic retailer projected a mid-single-digit decrease in revenue in 2025, notably forecasting a 10% dip in the first quarter. This outlook marks a shift from Nike’s initial guidance of overall sales growth for the year.

The company’s fiscal 2024 fourth-quarter results reflected this anticipated trend, with a 2% decrease in quarterly revenue to $12.61 billion, falling short of Wall Street’s expectations. Despite this revenue decline, Nike’s earnings per share of $0.99 exceeded analysts’ estimates of $0.66. However, direct-to-consumer sales also experienced an 8% downturn from the previous year to $5.1 billion.

Nike’s CEO, John Donahoe, acknowledged the challenges ahead, stating that fiscal 2025 would be a transitional year for the business. As the company endeavors to reignite sales growth, analysts have raised concerns about the recent performance. David Swartz, an equity analyst at Morningstar, described the sales figures as “weak,” reflecting broader investor apprehensions about stagnating growth at Nike.

While Nike’s gross margins improved to 44.7% in the fourth quarter, up from 43.6% the previous year, the results fell short of analyst expectations. This performance contributed to the company’s overall stock decline of over 17% in the past year, contrasting with the S&P 500’s significant gains during the same period.

Looking ahead, Nike faces pressure to maintain its competitive edge in the athletic footwear market amidst growing challenges from rivals like Adidas and emerging brands such as On and Deckers’ Hoka brand. Despite these headwinds, Nike executives remain confident in their product pipeline, emphasizing plans for introducing new products that are expected to impact the company’s financials positively by the end of the year.