Blue Whale News, June 28th (Reporter Wang Hanyi) On June 27th local time, Nike (NKE. N) released its financial results for the fourth quarter and full year of the 2024 fiscal year as of May 31, 2024. Nike Group achieved a revenue of $12.606 billion in the fourth quarter, with analysts expecting $12.86 billion, lower than market expectations.
In the fiscal year 2024, Nike Group achieved a revenue of 51.362 billion US dollars, an increase of 1% year-on-year on the basis of unchanged exchange rates; Realized a net profit of 5.7 billion US dollars, a year-on-year increase of 12%. It can be said that the revenue is basically the same as the previous year, and the growth has come to a standstill.
Nike executives attribute the lower than expected revenue to a series of factors. They stated that the company's lifestyle business has declined this quarter, and the growth momentum of sports products such as basketball and running shoes is not enough to offset this impact.
Nike CFO Matt Friend stated during a conference call with analysts that the company is adjusting its product lineup to reignite consumer interest.
It is worth noting that in the fiscal year 2024, the Greater China region achieved a revenue of $7.545 billion, a year-on-year increase of 8% on the basis of unchanged exchange rates, achieving seven consecutive quarters of positive growth. The EBIT in the Greater China region was $2.309 billion, a year-on-year increase of 1%.
Among them, the Greater China region achieved a revenue of 1.863 billion US dollars in the fourth quarter, a year-on-year increase of 7% on the basis of unchanged exchange rates, higher than market expectations; The EBIT in Greater China was $548 million, lower than market expectations and an increase of 4% year-on-year.
In the just concluded 618 shopping festival, Nike won the top spot on the Tmall Sports Outdoor Brand and Store Sales Chart, as well as the top spot on 10 other charts, including the Tmall Running and Basketball Category Sales Chart, Sports Outdoor Live Chart, Sports Outdoor Member Transaction Amount Chart, and Sports Outdoor New Member Recruitment Chart.
However, Matt Friend still pointed out that Nike is facing challenges in the Chinese market, suggesting that if the 618 shopping festival is not launched early, the company's sales in China may not meet expected targets.
Matt Friend emphasized, "Despite frequent promotional activities in the Chinese market, we will still manage Nike and its partners' inventory prudently. Although we are cautious about the market outlook in the short term, we remain optimistic about Nike's long-term competitiveness in the Chinese market."
Among Nike's multiple brands, the Converse brand has once again fallen behind in performance. The brand's revenue decreased by 18% to $480 million, mainly due to a decline in sales in the North American and Western European markets.
In addition, at the product level, Nike has been questioned for its lack of innovation, leading to emerging brands such as Envy and HOKA seizing market share. The CEO previously stated at the financial report meeting that the company is reducing orders for classic shoe models such as Air Force 1 and Pegasus and increasing investment in new product development, but the effect is still unknown.
"The user group of the entire footwear industry has undergone a more significant change. Previously, people used to prefer convergence in the consumption process, but now there is a focus on personalization and differentiation. In the field of innovation, Nike and Adidas, as leading companies in comprehensive running shoes, are indeed differentiated by emerging brands such as Angpao." Senior brand management expert and founder of Shanghai Liangqi Brand Management Co., Ltd. Cheng Weixiong said in an interview with Blue Whale News that the future running shoe market will become increasingly segmented.
In terms of strategy adjustment, Nike has attempted to directly promote sales through its own directly operated websites and retail stores, reducing reliance on wholesalers such as FL.US. However, the company has recently begun to reassess this strategy and admitted in April that it has taken too much step in reducing reliance on wholesalers. Fortunately, the adjustment effect has been shown in the latest financial report, with Nike's direct sales revenue decreasing by 8% year-on-year and wholesale revenue increasing by 5%.
In addition, in December last year, Nike also launched a restructuring plan, planning to reduce expenses by approximately $2 billion over the next three years. Following that, just two months later, Nike further announced that it would lay off 2% of its employees to over 1500 positions, aiming to more effectively focus resources on areas with growth potential such as running, women's sports products, and the Jordan brand.
At the same time, Nike has also turned its attention to the upcoming 2024 Paris Olympics, hoping to achieve a rebound in performance through this global sports event.
However, due to Nike's previous downward revision of its annual performance guidelines and the expected 10% decrease in sales for the current quarter, it triggered a chain reaction in the market, leading to fluctuations in the stock price.
In Thursday's post market trading on the US stock market, Nike's stock price also seemed to be hit by a sudden cold wind. After the financial report was released, Nike's stock price fell more than 12% after market hours. As of the close on June 27th local time, Nike closed at $94.19 per share, with a market value of $142.17 billion.