Nike is set to report its fiscal fourth-quarter results after the market closes on Tuesday. The company is struggling to regain sales growth and turn around its business under CEO Elliott Hill.
Sales are expected to fall again. Nike previously said it expected sales to decline for the rest of the calendar year, with a 2% to 4% drop in fiscal Q4. This fell short of Wall Street estimates, which predicted a 1.9% increase.
Key Details
- An unexpected benefit: The results include an unexpected boost from tariff refunds that were not accounted for in previous guidance.
- Regional outlook: CFO Matt Friend stated on the Q3 earnings call that Nike expects sales to fall by a low single-digit percentage for the remainder of the calendar year. This is driven by growth in North America, but offset by a large drop in China.
- Tariff impact: Nike's gross profit margin was affected last quarter due to higher tariffs in North America.
- Q3 Numbers: In the third quarter, Nike reported 3% sales growth in North America, while revenue in its Greater China market fell 7% to $1.62 billion.
Analyst Expectations (LSEG survey)
- Q4: Earnings per share of $0.13, revenue of $10.86 billion
- Full Fiscal Year: Revenue of $46.27 billion, earnings per share of $1.51
- Next Fiscal Year (ending May 2027): Revenue of $46.47 billion
Turnaround Efforts
CEO Elliott Hill has been working to reposition Nike for growth amid slumping sales. He previously stated that parts of the business initially focused on are beginning to show momentum.
The turnaround is set against a backdrop of macroeconomic uncertainty, including tariffs, the Middle East conflict, and rising gas prices. Friend mentioned potential unexpected impacts from factors such as rising oil prices and lowered consumer confidence.
- In April, Nike cut 1,400 roles in its second workforce reduction this year.
- The company announced a planned CFO transition, with former Pfizer executive David Denton taking over from Friend effective August 17.
World Cup Impact
Nike experienced a boost from the World Cup hosted across North America this summer. Its advertisements outperformed rival Adidas and gained traction on social media, despite not being an official sponsor.
Nike will host a conference call with analysts at 5 p.m. ET.