Executive Summary
Nike’s fiscal 2024 fourth quarter (QQ4 2024) demonstrated a transitional year-end as the company returned to offense after a challenging period. Revenue for the quarter was $12.606 billion, flat on a currency-neutral basis, with notable pressure from Digital and Lifestyle declines offsetting strength in Performance. Gross margin expanded 110 basis points to 44.7%, driving operating margin to 12.6% and an EPS of $0.99. For the full year, revenue was flat on a reported basis and up 1% currency-neutral, with diluted EPS up 15%. The quarter featured meaningful progress in core athletic categories and a disciplined emphasis on supply-side optimization, pricing strategy, and profitability rather than top-line growth alone.
Management outlined a deliberate, multi-year comeback plan anchored in four pillars: (1) sharpening the focus on sport, (2) accelerating pace and scale of newness and innovation, (3) driving bigger, bolder brand storytelling, and (4) elevating marketplace execution to improve brand distinction. A central component is the Speed Lane initiative—an evolution of Nike’s Express Lane approach designed to shorten design-to-market cycles and accelerate testing and production through partner ecosystems and the Bowerman Lab. Management signaled that the initial cadence of next-gen franchises (Pegasus 41, Peg Premium, Vomero 18) and the Air Max/Signature programs will begin to contribute more meaningfully in H2 FY2025, with further innovation across running, basketball, and lifestyle franchises.
The company’s guidance reflects a sector-wide normalization to slower growth in the near term, with fiscal 2025 revenue expected to decline mid-single digits, and the first half toward high-single digits negative. FX headwinds have intensified, adding roughly 1 percentage point of revenue pressure, while gross margin is anticipated to rise modestly (10–30 bps) on mix and pricing benefits. Nike plans to reinvest nearly $1 billion into consumer-facing activities in FY2025 to rebuild momentum, including expanded ground-game efforts, increased design and merchandising resources, and higher brand marketing in connection with EC24 and the Paris Olympics. Investors should focus on (i) the pace and scale of new product introductions and the speed with which they convert into retail sales, (ii) the durability of margin expansion amid franchise rationalization, and (iii) the trajectory of Nike Digital and wholesale channel mix as the company works to rebalance the portfolio over the next 18–24 months.
Key Performance Indicators
Key Insights
Revenue (Q4 2024): $12.606B, YoY -1.7%, QoQ +1.4%. Gross margin: 44.7% (Q4), +110 bps YoY. Operating income: $1.585B, up 60.9% YoY. Net income: $1.50B, up 45.5% YoY. Diluted EPS: $0.99, up 47.8% YoY. Nike Direct revenue decline: -7% in Q4; Nike Digital -10% in Q4; Wholesale +8% in Q4. Cash from operations: $2.619B in Q4; free cash flow: $2.406B; cash and equivalents: $9.86B; total debt: $11.952B; net debt: $2.092B. Balance sheet resilience evidenced by cash richness (cash & equivalents plus ...
Financial Highlights
Revenue (Q4 2024): $12.606B, YoY -1.7%, QoQ +1.4%. Gross margin: 44.7% (Q4), +110 bps YoY. Operating income: $1.585B, up 60.9% YoY. Net income: $1.50B, up 45.5% YoY. Diluted EPS: $0.99, up 47.8% YoY. Nike Direct revenue decline: -7% in Q4; Nike Digital -10% in Q4; Wholesale +8% in Q4. Cash from operations: $2.619B in Q4; free cash flow: $2.406B; cash and equivalents: $9.86B; total debt: $11.952B; net debt: $2.092B. Balance sheet resilience evidenced by cash richness (cash & equivalents plus short-term investments at $11.582B) and a strong current ratio (2.40) with a debt-to-equity ratio of ~0.83. FY2025 guidance: revenue down mid-single digits; first quarter revenue down ~10%; GM expansion ~10–30 bps; SG&A modestly higher as invest-to-grow; tax rate in the high teens. Management commentary highlights: strong progress in Performance, acceleration of speed and newness, and a relaunch of brand storytelling around sport, Olympics, and vault-driven lifestyle initiatives.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
12.61B |
-1.71% |
1.42% |
| Gross Profit |
5.63B |
0.70% |
1.29% |
| Operating Income |
1.59B |
60.91% |
18.64% |
| Net Income |
1.50B |
45.49% |
27.99% |
| EPS |
0.99 |
47.76% |
28.57% |
Key Financial Ratios
operatingProfitMargin
12.6%
operatingCashFlowPerShare
$1.73
freeCashFlowPerShare
$1.59
dividendPayoutRatio
37.3%
Management Commentary
The call centered on four themes: (1) Strategy and Speed: John Donahoe outlined a renewed focus on sport, a multi-year innovation cycle, and the Speed Lane initiative to accelerate design-to-market. He emphasized accelerating new franchises (Peg 41, Peg Premium, Vomero 18) and a broader Olympic/Paris brand storytelling push. (2) Execution and Channel Mix: Matt Friend highlighted digital headwinds (-10% in Q4) and a shift toward supply discipline for classic franchises, with wholesale up mid-single digits and direct channels bearing pressure. The company is managing a deliberate channel mix to protect long-term franchise health and maximize full-price sell-through, even as near-term revenue is pressured. He also cited a “Safe to Invest” discipline and a planned reallocation of roughly $1B to consumer-facing activities in FY2025. (3) Geography and Demand: Greater China traffics slowed materially, with ongoing macro uncertainty in EMEA and other regions; however, ownership of running and lifestyle growth in Korea and Japan remained favorable, and the order book for holiday 2024 and spring 2025 was strong. (4) Risk and Outlook: The guidance emphasizes a challenging but transitional year, with expects for meaningful second-half improvement driven by new products, and a continued emphasis on demand-sensing and grocery-like execution in marketing and retail. Key quotes include John Donahoe’s assertion of rebuilding momentum by “put sport back at the center,” leveraging Speed Lane and an intensified brand voice for the Olympics, and Matt Friend’s confirmation of reinvestment and a plan to exit FY2025 with momentum as new products scale across channels.
"We're sharpening our focus on sport, accelerating our pace and scaling of newness and innovation, driving bigger, bolder storytelling, and elevating the entire marketplace to fuel brand distinction."
— John Donahoe
"In turn, we are reinvesting nearly $1 billion in consumer-facing activities in fiscal 2025, which we expect to accelerate our return to strong growth."
— Matthew Friend
Forward Guidance
Nike’s near-term guidance acknowledges a transitional landscape, with revenue expected to decline mid-single digits in FY2025 and ~10% revenue decline in Q1. The company anticipates meaningful sequential improvement in the second half, supported by Peg 41, Peg Premium, Vomero 18 launches, the Air Max DN capstone, and ongoing expansion of the new-ness pipeline. Gross margin is expected to expand modestly (10–30 bps) as pricing actions and supply-chain efficiencies offset channel mix and FX headwinds. Management also projects SG&A to rise modestly to fund demand creation and brand investments, while maintaining flat operating overhead. Risks include greater China macro headwinds, continued weakness in Nike Digital through the early part of FY2025, and the risk that wholesale order books and new product launches take longer to scale than anticipated. The company will monitor the balance between growth in Performance and the slower ramp of Lifestyle and Classic franchises. Investors should monitor: (i) the cadence of new product introductions (Peg 41, Vomero 18, Peg Premium, Air Max DN) and their sell-through, (ii) the rate of improvement in Nike Direct vs Digital, (iii) the evolution of the wholesale vs direct channel mix, and (iv) macro developments in Greater China and FX translation. The Paris Olympics and EC24 marketing investments are likely to act as catalysts for consumer engagement and brand equity if executed effectively.