Why is Nike’s stock price down? NKE shares plunge after gloomy sales warning

Shares of Nike are tumbling this morning. As of the time of this writing, the company’s stock (ticker: NKE) is down over 14% to $80.65 per share in premarket trading. The plummet in Nike’s share price comes after the company announced its fiscal Q4 2024 results yesterday. Here’s what you need to know.

What’s happened?

Nike, Inc. announced its fourth quarter 2024 results yesterday, but its shares have tumbled since the report. For its Q4 2024, Nike reported $12.6 billion in revenue, down 2% from the $12.8 billion the company reported in the same quarter a year earlier.

Analysts expected the company to generate $12.84 billion during the quarter, according to CNBC.

On the brighter side, Nike’s net revenue for the quarter was $1.5 billion, equating to 99 cents per share. That was up from $1.03 billion in net revenue, or 66 cents per share, from the same quarter a year earlier.

For its full fiscal 2024, Nike posted sales of $51.3 billion, which is relatively in line with the $51.2 billion the company posted in 2023.

Why did Nike stock fall?

Of course, if the company’s fiscal year revenue is relatively flat and its Q4 net revenue rose by nearly half a billion from the quarter a year prior, why is the stock taking such a beating?

One of the main reasons seems to do with Nike’s stated outlook. The company reported that it expects to see its sales decline 10% in its current quarter, which is Q1 of fiscal 2025. Analysts had been expecting a decline, but they were expecting that decline to be much smaller—in the range of around 3%.

Nike also announced that it now expects full fiscal year 2025 sales to be down in the mid-single digits. Most analysts expected Nike 2025 sales to increase by around 1%.

What reason is Nike giving for the lower sales forecast?

On a fiscal call announcing the Q4 results and future outlook, Nike chief financial officer Matt Friend said that the 10% sales decline it expects for the current quarter “reflects more aggressive actions in managing our classic footwear franchises; continuing challenges on Nike Digital; muted wholesale order books, with newness not yet at scale; a softer outlook in Greater China; and a number of quarter-specific timing factors.”

Nike stock has had a bad first half of the year

Before today’s premarket fall, Nike’s stock had been having a rough year anyway. In January, the stock had traded at over $107 per share. But by the close of the bell yesterday, Nike shares had fallen to just above $94 per share.

That’s a decline of over 13% since the start of the year—and that’s before the nearly 15% drop in its share price in premarket trading this morning.