Shares of the company were down 12% in extended trading after Nike also forecast a wider-than-expected drop in first-quarter revenue.
The company’s efforts to drive more sales through its direct-to-consumer channel have failed to reap rewards as customers turn more picky about non-essential spending and splurge on fashionable and innovative brands such asShares of the company were down 12% in extended trading after Nike also forecast a wider-than-expected drop in first-quarter revenue.Nike expects annual revenue to be down in the mid-single digits compared with estimates of a rise of 0.91%.
“The slowdown in total sales and for Nike Direct is hard to ignore. We continue to rack our brain for where Nike can get its next leg of growth,” said Zachary Warring, equity analyst at CFRA Research.
The Air Jordan maker’s strategy to double down on wholesale partnerships helped wholesale revenue in the reported quarter rise 5%, while growth in its direct-to-consumer business fell 8%.Nike’s net revenue fell 1.71% to $12.61 billion, compared with analysts’ average estimate of $12.84 billion, according to LSEG data.Nike is also struggling with weak demand in international markets, including China, where brick and mortar traffic declined in double digits versus prior year, executives said.