Following yesterday’s release of Nike’s figures for three months ending 31 May 2025; Pippa Stephens, senior apparel analyst at GlobalData, a leading data and analytics company, offers her view: “Nike’s performance worsened further in Q4 FY2024/25, with revenue falling 12.0% to $11.1bn, in line with its expectations, following a decline of 9.3% in the prior quarter. This was mainly caused by its lag in innovation and tough competition in the lifestyle segment from its biggest rival Adidas, though it was also dragged down by Converse’s outdated aesthetic, causing the brand’s sales to drop 25.6%, while Jordan fell 16.4%. This deceleration in its final quarter led Nike’s revenue for FY2024/25 to decline 9.8%, while gross profit fell 13.5% to $19.8bn, emphasising the challenge it still faces in turning around its fortunes. To help with this, the brand is continuing to focus on its Win Now strategy, which aims to enhance product development, boost connection with consumers, and elevate its marketplace. Though the launch of its highly anticipated NikeSKIMS collaboration has been postponed due to production delays, Nike still expects its decline to soften in Q1 FY2025/26, with only a mid-single digit drop in sales forecast. However, profits will continue to be hit, with tariffs expected to have a $1bn impact across the full year.
“The Nike brand experienced declines across all regions, with Greater China the most severe, as constant currency revenue fell 20% in Q4 and 12% across the full year. Though the economic situation in the country has begun to improve, with consumers now regaining their propensity to spend, Nike is suffering from consumers’ growing preference for local brands such as ANTA and Li-Ning, which are able to tap into the design preferences of these shoppers more effectively. North America declined 11% and 9% in Q4 and FY2024/25, respectively, and with the brand now raising prices for consumers in the US because of new tariffs, it will find it even harder to claw back sales. EMEA also suffered, falling 10% in both periods, with Adidas stealing shoppers in its home region due to its greater innovation and the superior fashion credentials of its Originals lines. Asia Pacific & Latin America was the most buoyant region, declining just 3% in both Q4 and FY2024/25, due to its emerging markets experiencing strong economic growth, with rising middle-class populations, giving consumers more money to spend on sportswear.
“Nike’s footwear division remained the most challenging, with reported revenue falling 12.8% in Q4 and 11.7% in FY2024/25. This is primarily due to consumers seeking day-to-day styles preferring the more fashionable options at competitors like Adidas and New Balance, as well as Nike’s lag in innovation, causing it to fall behind performance specialists such as On and Hoka, though the brand’s CEO Elliott Hill did confirm that its running sales improved in Q4, up high-single digits. Apparel was slightly better in Q4, dropping 9.7%, leading the full year to decline 5.9%, supported by its quality and performance attributes. Nike’s direct-to-consumer (DTC) channels experienced the most problems, with constant currency revenue falling 12% across the full year, dragged down by its online platform, which fell 20%, while its stores remained flat. Comparatively, its wholesale sales fell 6%, indicating a more positive outlook from its key retail partners.”
