As much as Nike might have beat investors forecasts, who had predicted their lowest drop in revenue in the last 5 years for their latest Q3 earnings, it’s still a bit of a mixed bag for the Beaverton brand.
Shares in Nike (NKE) were initially up on the news as the swoosh brand reported a smaller than expected drop in its third quarter sales. Net sales for the latest quarter were $11.3 billion, which was down 9% from $12.4 billion from the same period last year. Net income for the latest quarter was $794 million, which was down 32% from $1.2 billion when compared to the same period last year. Diluted earnings per share was $0.54, which was also down 30% from $0.77 compared to the same period last year. Comparable net sales for the latest quarter was $11.3 billion which was down 9% from $12.4 billion from last year. Nike’s wholesale revenues for the quarter were $6.2 billion which was down 7% from last year & by category, footwear sales for the period were down 12% to $7.2 million compared to $8.2 billion last year. Apparel sales were down 3% to $3.2 billion & equipment sales were down 2% to $477 million.
Nike veteran, Elliot Hill, was drafted in as the new CEO of Nike back in September 2024 to steer the swoosh back to the top with the intention of turning things around in a relatively short period as the brand had focused more on its direct to consumer channels as well as growing competition from new kids on the block like Hoka & On. With heavy discounting on classic swoosh models like Air Force 1 & Dunks offsetting against the launch of new silhouettes like the Pegasus Pro & Vomero 18, it’s clear that Nike needs to get its inventory in order. The newly launched models may have offered some breathing room for now for Hill & the swoosh brand, but what Nike probably really needs for the foreseeable is a Yeezy, or equivalent. As much as they have tried to tap into the female world of athletic apparel with their latest ‘So Win’ campaign, sneakers still accounts for the majority of their inventory, and revenue. Hill’s “Win Now” strategy, which includes more new product ranges as well as boosting its presence in Shanghai, Beijing, Los Angeles, New York and London is set to put the Swoosh back at the top of its game. Hill has also previously stressed the importance of turning Nike’s focus back to its core business of sports as well rebuilding its relationships with its retailers after smaller accounts were closed following ex-CEO John Donahoe’s focus on DTC (direct to consumer).
The latest quarter saw a boost in Nike’s marketing & advertising as Hill looked to move “at pace” to re-connect with its core consumers. Q3 saw Nike run its first Super Bowl ad in 27 years with its ‘So Win’ campaign which featured a roster of female athletes from basketball to gymnastics. Analysts expect several more quarters of comparable revenue declines as Nike looks to get a hold on discounting its legacy silhouettes such as Jordan’s & Air Force 1’s in an ever changing sneaker market. With Trump’s tariffs also looming over the swoosh plus the general economic uncertainty & a declining Chinese market, Nike have forecast a deeper drop in comparable revenue for Q4. The irony is Nike’s classic silhouettes will probably be popping again by this time next year, or the year after, & that’s just how the cookie crumbles in the business of sneakers. Also don’t forget to subscribe to Sneaker Jobs & follow @sneaker_jobs to keep up to date with all the latest industry news.
What’s encouraging is Nike made an impact this quarter leading with sport, through athlete storytelling, performance products and big sport moments.
Elliot Hill – CEO Nike
