Nike shares fall after company forecasts bigger-than-expected sales decline in 2025

Nike (NKE) stock fell nearly 14% on Friday in early pre-market trading after the retailer said it expects revenue to decline more than previously thought next year.

The company said Thursday that it expects revenue to decline to single digits in 2025, including an expected 10% decline in the first quarter. Nike had initially targeted overall sales growth in 2025.

The guidance reflects the ongoing trend from Nike’s fiscal 2024 fourth quarter, which the footwear company reported after the closing bell on Thursday. The company said quarterly revenue in the fourth quarter fell 2% from a year earlier to $12.61 billion, below Wall Street estimates of $12.86 billion. Meanwhile, Nike’s earnings per share of $0.99 beat analysts’ expectations of $0.66. Nike’s direct-to-consumer sales fell 8% from the same quarter last year to $5.1 billion.

Finance [2025] “It will be a transitional year for our business,” Nike CEO John Donahoe said during the company’s earnings call.

The company is trying to reignite sales growth in what has been a lackluster year for the stock so far. David Swartz, an equity analyst at Morningstar, told Yahoo Finance that the sales number was “very weak” and was the main concern with the release.

Nike’s gross margins rose to 44.7% in the fourth quarter, compared to 43.6% in the same period last year, but fell short of analysts’ expectations of 45.3%.

The company’s stock entered the issue down more than 17% over the past year, a far cry from the S&P 500’s (^GSPC) gain of 26%, as investors became wary of slowing growth at the retailer.

“Overall, this long-time industry leader continues to struggle surprisingly well, and we believe investors’ patience with management is diminishing by the day,” Tom Nikic, senior vice president of equity research at Wedbush, wrote in a note following the earnings release. “Long term, NKE has been one of the most successful growth stories in our coverage, and we continue to wait for the brand to regain its mojo. But it looks like we’ll have to keep waiting a while longer.”

Wall Street is keeping a close eye on Nike’s product pipeline as the Oregon-based company works to fend off competition in the core athletic footwear market from rivals like Adidas (ADDYY) and relative upstarts like On (ONON) and Deckers (DECK)’s Hoka brand.

Nike executives stressed that they believe their plans to expand the new product range are on the “right track” and will impact the company’s finances by the end of the year.

“We plan for sequential, meaningful improvement in the second half versus the first half, and that starts with the confidence we have around the new products we bring to market,” Nike CFO Matthew Friend said on the earnings call.