Nike's Q4 Earnings: What Wall Street Expects

Nike, Inc. (NKE) is set to report its fiscal 2024 fourth-quarter and full-year results after the bell on Thursday, June 27. As the athletic apparel giant prepares to unveil its financial performance, investors and analysts are eagerly awaiting the company's earnings report. This article explores the key factors driving Nike's revenue growth or decline and how they align with analysts' expectations.

Analysts' revenue and EPS estimates for Nike's Q4 2024 were $12.9 billion and 84 cents, respectively. Actual results showed revenue of $12.6 billion and EPS of 99 cents. This indicates a slight underestimation of revenue but a significant overestimation of EPS. The discrepancy between estimates and actual results highlights the importance of understanding the key factors influencing Nike's financial performance.

Nike's revenue growth or decline is driven by several key factors. Firstly, the company's direct-to-consumer sales, including its digital platforms and owned stores, have been a significant driver of growth. However, in the fourth quarter of fiscal 2024, NIKE Direct revenues were down 7% on a currency-neutral basis, primarily due to declines in NIKE Brand Digital and NIKE-owned stores. This decline may be attributed to increased competition and changing consumer behavior.

Secondly, Nike's wholesale revenues have been a crucial factor in its growth. In the fourth quarter, wholesale revenues increased by 8% on a currency-neutral basis, indicating a strong demand for Nike products among its retail partners. Lastly, the company's performance in key markets, such as North America and Greater China, has a significant impact on its overall revenue. In the fourth quarter, Nike experienced currency-neutral growth in Greater China, APLA, and EMEA, but a decline in North America.

Analysts expect Nike's top-line results to increase from the same time last year, with the company projected to post net income of $1.27 billion, or 84 cents per share, on $12.9 billion in revenue. However, the decline in NIKE Direct revenues and the mixed performance in key markets may lead to a more nuanced earnings report than analysts' expectations.

Nike's guidance for fiscal 2025, issued in its third-quarter earnings call, projects a low-single-digit revenue decline in the first half of the year. This downbeat projection is due to the company's desire to "shift our product portfolio toward newness and innovation," along with a "subdued macro outlook around the world," according to CFO Matthew Friend. Analysts, however, expect Nike's top- and bottom-line results to increase from the same time last year. The discrepancy between Nike's guidance and analysts' estimates suggests that investors may be overly optimistic about the company's prospects, potentially leading to a stock price correction if earnings fall short of expectations.



In conclusion, Nike's Q4 earnings report will provide valuable insights into the company's financial performance and its ability to navigate the challenges it faces. Analysts' expectations for revenue and EPS may not fully capture the nuances of Nike's earnings report, given the mixed performance in key markets and the strategic shift towards new products and innovation. Investors should closely monitor the company's earnings call and assess the implications of its guidance for fiscal 2025 on its stock price.