Executive Summary
NIKE Inc. reported a challenging Q4 for fiscal year 2024, with revenues totaling $12.61 billion, reflecting flat growth on a currency-neutral basis. The quarter saw strong performance in its athletic segments, but this was countered by declines in lifestyle products. Management acknowledged increased macroeconomic uncertainties and heightened foreign exchange pressures leading to a revised outlook for fiscal 2025, forecasted to be down mid-single digits in revenue, particularly in the first half of the year. Key management remarks emphasized continued commitment to sport-centric innovation and the urgency to adapt rapidly to market shifts, signaling a significant year of transition ahead for NIKE.
Key Performance Indicators
Key Insights
**Revenue Performance:** NIKE Inc's revenue for Q4 2024 stood at $12.61 billion, representing 1% decrease year-over-year, with noteworthy performance from performance products offset by declines in lifestyle lines. **Profitability:** Gross profit margin expanded to 44.7% due to strategic pricing and enhanced supply chain efficiency. The net income reached $1.5 billion, demonstrating a remarkable 45.49% increase year-over-year, leading to diluted EPS of $0.99. This reflects a significant com...
Financial Highlights
Revenue Performance: NIKE Inc's revenue for Q4 2024 stood at $12.61 billion, representing 1% decrease year-over-year, with noteworthy performance from performance products offset by declines in lifestyle lines. Profitability: Gross profit margin expanded to 44.7% due to strategic pricing and enhanced supply chain efficiency. The net income reached $1.5 billion, demonstrating a remarkable 45.49% increase year-over-year, leading to diluted EPS of $0.99. This reflects a significant comeback amid ongoing challenges.
Cash Flow and Balance Sheet Health: The company reported a robust cash flow from operations amounting to $7.4 billion, up 27% year-over-year, and maintained cash reserves of approximately $9.86 billion at the end of Q4. Inventory levels were effectively managed, declining by 11% year over year, which supported NIKE’s cash flow health. Current ratio stands at 2.40, indicating strong liquidity to cover short-term obligations. Total debt is $11.95 billion against total stockholders’ equity of $14.43 billion, reflecting a healthy debt-to-equity ratio of 0.83.
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
Strategic Focus on Performance: Management emphasized the drive towards performance products, indicating double-digit growth across key sports segments such as basketball and fitness, underscoring a commitment to innovation. As CEO John Donahoe remarked, "We are sharpening our focus on sport, accelerating our pace and scaling newness and innovation."
Management Commentary on Challenges: CFO Matt Friend outlined the Q4 challenges, particularly within NIKE Digital and the lifestyle category, noting a 10% drop in digital sales due to softer traffic and increased promotional pressures. He commented, "We have been navigating several headwinds, which we now expect to have a more pronounced impact on fiscal 2025."
"Our sharp focus around newness and innovation starts with performance and we're seeing the impact across key sports" - John Donahoe
— John Donahoe
"In the next few quarters, we are confident that we are repositioning NIKE to be more competitive." - Matt Friend
— Matt Friend
Forward Guidance
For fiscal year 2025, NIKE anticipates a revenue decline of mid-single digits with significant pressure in the first half due to aggressive management of classic footwear franchises and a softer outlook in key markets, particularly Greater China. The effective management of inventory and new innovative product rollouts are expected to enhance revenue recovery in the latter half, with management highlighting expectations of market share gains as performance products gain traction.