What caused NKE's Q4 2024 earnings to miss forecasts?

Nike's Q4 2024 earnings missed forecasts due to several key factors:

1. Impact of Tariffs and Supply Chain Disruptions: Nike faced challenges due to new tariffs on imports from China and Mexico, which affected its supply chain and cost management. These disruptions, coupled with the need to rebuild relationships with retailers, impacted its fiscal fourth quarter, leading to a cautious outlook.
2. Decline in Sales: Nike's sales were impacted by weak traffic, which fell in the double digits. This decline was driven by a slump in its lifestyle segment and a decrease in digital revenues, reflecting shifting consumer preferences. Additionally, sales in Greater China, a key market, declined by 17%.
3. Inventory Management Issues: Nike had to deal with excess inventory, which it accumulated due to strategic decisions made earlier. This issue was exacerbated by the shift in consumer demand and had to be addressed through heavy markdowns, leading to a contraction in gross margin.
4. Currency Fluctuations and Macroeconomic Challenges: Nike faced headwinds from currency fluctuations and ongoing macroeconomic volatility, which affected consumer confidence and, consequently, its sales. The company also mentioned the impact of evolving tax regulations as another external challenge.
5. Impact of New Tariffs on Shipment Timing and Foreign Exchange: Nike anticipated a revenue decline in the mid-teens for the fourth quarter, primarily due to the impacts of new tariffs on shipments from North America and foreign exchange headwinds. These factors, combined with the effects of prior-year restructuring charges, were expected to further compress gross margins.

In summary, Nike's Q4 2024 earnings miss was primarily caused by a combination of weak sales, inventory management issues, and external factors such as tariffs, supply chain disruptions, and macroeconomic challenges.