Nike announced Thursday that, to $11.3 billion, recorded revenues dropped 9% in the fiscal third quarter. Though warnings that tariffs would have a major impact on sales in the fourth quarter — up to a “mid-teen” decrease, according to the brand — the quarterly results topped analyst projections of $11.01 billion. After-hours trade sent shares declining 5%.
CFO Matthew Friend on an analyst call on Thursday said, “We believe that the fourth quarter will reflect the largest impact from our actions, and that the headwinds to revenue and gross margin will begin to moderate from there.” “We are also navigating several external factors that create uncertainty, including geopolic dynamics, new tariffs, volatile foreign exchange rates and tax regulations, as well as the impact of this uncertainty and other macro factors on consumer confidence.”
A 17% sales drop in China to $1.73 billion particularly affected Q3 sales; CEO Elliott Hill stated competition was “a bit more aggressive” than he had observed following a December visit. The company’s largest market, North American sales dropped 4% to $4.86 billion; EMEA (Europe, the Middle East and Africa) sales dropped 10% to $2.8 billion.
The first quarter since Hill unveiled his “Win Now” approach Former Nike employee Hill replaced John Donahoe in October to guide a turnaround for the firm, which let off more than 1,600 workers last year and has had a streak of poor quarters with shares declining 28 percent in last year. In Q2 sales dropped 9% as well.
