NIKE running lower after posting mixed Q4 results as company beat on EPS again, but fell short on the top-line, amplifying competitive concerns (94.19 +0.13)
- For the fourth consecutive quarter, NIKE (NKE) beat EPS expectations, reflecting strong gross margin as the company's inventory returns to healthy levels. Gross margin expanded by 110 bps to 44.7% as inventories fell by 11%, allowing NKE to be less promotional.
- However, the main concern surrounding NKE right now revolves around the demand picture, and in that regard, its results disappointed. Total revenue fell by 1.6% to $12.6 bln, missing expectations, with softness continuing in its core North America market where revenue dipped by 1%.
- The revenue decline and miss will only amplify concerns that NKE is losing its competitive edge and giving up market share to up-and-coming brands like Deckers (DECK) owned HOKA and On (ONON).
- NKE is expected to issue FY25 revenue guidance during the earnings call at 5:00 p.m. ET. Its outlook will be key in terms of where the stock goes from here. Recall that during the Q3 earnings call, NKE warned that it expected FY25 to get off to a slow start.
- NKE shares are trading 5.6% lower in after-hours action.