Latest news with #AirForce1
Time of India
3 hours ago
- Business
- Time of India
Nike tops Q4 sales, profit estimates as CEO doubles down on sports focus
Nike reported a smaller-than-expected drop in fourth-quarter revenue and beat profit estimates on Thursday, as CEO Elliott Hill's strategy to focus product innovation and marketing around sports begins to pay off. The company, which has been grappling with competition in the running space, has heavily invested in running shoes and sneaker lines such as Pegasus and Vomero, and tried to cut its stock of older models such as the Air Force 1 and Air Jordan 1, through discounts. Under Hill, who joined in October last year, Nike has rekindled relationships with wholesale partners, expanding the company's presence at more physical retailers, and started selling on for the first time in six years. The company's fourth-quarter revenue fell 12% to $11.10 billion, compared with analysts' expectation of a 14.9% drop to $10.72 billion, according to data compiled by LSEG. Under Hill's "win now" strategy, Nike is also investing more into sport-focused marketing to regain its edge as a sports brand. The company on Thursday hosted an attempt by sponsored athlete Faith Kipyegon to run a mile in under four minutes. Paced by other star athletes in the glitzy, live-streamed event in a Paris stadium, Kipyegon fell short of the goal but set a new unofficial record. Nike reported fourth-quarter earnings per share of 14 cents, compared with analysts' average estimate of 12 cents. China continues to be a pain point in the reported quarter, the company said, as tougher economic conditions and competition hurt demand for Nike's sneakers in the country. Sales in China fell 21% in the fourth quarter, following a 17% fall in the prior three-month period. Its gross margin for the quarter ended May 31 fell 440 basis points following a 330 basis points drop in the third quarter. Nike's shares were down 2% in extended trading. They have fallen 19.6% so far this year.
Miami Herald
17 hours ago
- Business
- Miami Herald
Nike has bad news for its loyal customers
There's nothing quite like the feeling of opening a fresh box of Nikes. That new-sneaker smell. Those crisp, clean laces. But something's about to mess with that magic. It's not the design. It's not the tech. And it's not because your favorite athlete jumped to another brand. So not great news. Related: Nike fumbles its biggest launch of the year Nike's been through it this past year. Softening sales, too much old inventory, a messy digital experience. But it's been trying to fight back. New shoes. New strategy. New hype. And just as the company was starting to turn the corner, another pressure point landed. Like most surprises in 2025, this one comes with a price. Literally. Nike confirmed during its Q4 earnings call that new U.S. tariffs on imported footwear will cost the company an estimated $1 billion. Ouch. To offset the hit, Nike's pulling the lever it knows best: raising prices. But it's not the only lever. The company also said it's shifting production away from China and working with suppliers and retail partners to share the burden. The price hikes have already started. On June 1, prices went up - a move Nike brushed off as a "normal seasonal adjustment." Nothing to see here. Now, just a few weeks later, another round of increases is on the way. And this time, there's no dancing around it. Nike directly acknowledged the new price hikes are in response to tariffs. Related: Lululemon makes drastic cuts as part of strategy change "With the new tariff rates in place today, we estimate a gross incremental cost increase to Nike of approximately $1 billion," CFO Matt Friend said. Two price hikes in just a few months. One already in effect. One more on the way this fall. For shoppers, it all adds up. Nike can call them surgical, but to customers, they may feel more like salt in the wound. Inflation is already brutal. It's a risky move for a brand on the road to a comeback. Sticker shock probably isn't the vibe Nike wants heading into back-to-school and the holiday season. But execs say they're focused on long-term momentum, even if it means losing a few loyal fans along the way. Translation: Nike's way of saying "sorry, not sorry." These new price hikes land during what should be a turning point for Nike. The company is deep into its "Win Now" strategy, focused on overhauling internal teams, elevating performance product, and rethinking its once-overstuffed lineup of classics like the Dunk and Air Force 1. Full-year revenue fell 10% to $46.3 billion. Net income dropped a staggering 44% to $3.2 billion. That's nearly half of what Nike brought in the year before. But there are signs of progress: the new Vomero 18 already surpassed $100 million in sales. More on retail: Stanley Cup fans won't want to miss what just launchedH&M has bad news for its loyal customersWhy beauty will be the beast of Amazon Prime Day deals And recent wholesale orders from retail partners are trending up - especially in North America, where Nike is trying to strike the right balance of hype, distribution, and price. Still, timing is everything. And with customers already feeling stretched, any price hike carries risk. Tariffs may be out of Nike's control, but perception isn't. And in a crowded athletic market, that matters. For loyal fans, the latest chapter in Nike's comeback might come with an unwelcome twist: paying more. Because, hey, "Just Do It," right? Related: FedEx's cost-cutting could impact package delivery The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Fashion Network
20 hours ago
- Business
- Fashion Network
Nike's turnaround strategy faces stiff headwinds from tariffs and rivals
Nike is making progress in clearing out stocks of out-of-fashion sneakers, particularly the Air Force 1. The company believes it will have worked through the backlog by the end of the first half of this fiscal year. Not having to discount so heavily should boost profitability. Nike expects its gross margin — the difference between the price at which it buys and sells goods — to be down by 3.5 to 4.25 percentage points, including a 1 percentage point hit from tariffs, in the first quarter, compared with a 4.4 percentage point decline in the final three months. The company also looks to be ending its new product drought. The Vomero 18 shoe has generated more than $100 million in sales since its launch at the end of February. Meanwhile, the frenzy around the new hybrid loafer and sneaker, the Air Max Phenomena, has driven resale prices beyond $500 — even before its official release. That looks like a blast from Nike's past, when new models had sneakerheads salivating. Also evoking the kind of innovation that has been so sorely lacking is the Cryoshot, which reinterprets classic football boots for everyday dressing. It builds on the #bootsonlysummer TikTok trend of wearing soccer cleats in the street. For the past two and a half years, such foresight has largely belonged to Gulden. It's a welcome shift to see Nike finally riding a trend — rather than missing it, as it did with retro low-rise shoes. But Hill is far from the finish line. The delay in launching NikeSkims — the collaboration between the sportswear giant and Kim Kardashian 's shapewear company — looks like an own goal, especially given the hype around the tie-up. Of course, Hill wants to make such an important debut, right? However, the long gap between the February announcement and the product release seems unfortunate. It gives rivals like Lululemon Athletica Inc. time to spruce up their collections. The CEO also faces the challenge of Donald Trump 's tariffs. While no company is immune from the levies, they are especially unhelpful to retailers amid revival plans, such as Nike, Target Corp. and Gap Inc. Nike said it faced a cost — before any measures to mitigate the impact of tariffs — of about $1 billion. However, it aims to work with its suppliers and retail partners to offset some of the expense and will implement 'surgical' price increases beginning this fall. The last time sneaker makers encountered such a significant external challenge was four years ago, when Covid-19 lockdowns in Vietnam disrupted supply chains. At the time, Nike didn't struggle with demand — consumers were still clamoring for its sneakers. Today, however, it faces fierce competition not only from a resurgent Adidas but also from rising challengers like On Holding AG and Deckers Outdoor Corp.'s Hoka, which gained ground while Donahoe pursued his ill-fated strategy of selling directly through Nike's own stores and websites. As in the luxury sector, brands that remain highly desirable to consumers will be the ones able to raise prices. Through to Thursday's close, Nike shares are down about 34% over the past year, and about 23% since Hill's appointment in September. They trade at about 2 times the next 12 months' sales, compared with Adidas's 1.5 times. That premium will look too lofty until Hill can turn trying into victory. The views expressed are those of the author and do not necessarily reflect those of the publication or its affiliates. Andrea Felsted is a Bloomberg Opinion columnist covering consumer goods and the retail industry. Previously, she was a reporter for the Financial Times. with Reuters
Fashion Network
20 hours ago
- Business
- Fashion Network
Nike's turnaround strategy faces stiff headwinds from tariffs and rivals
Nike is making progress in clearing out stocks of out-of-fashion sneakers, particularly the Air Force 1. The company believes it will have worked through the backlog by the end of the first half of this fiscal year. Not having to discount so heavily should boost profitability. Nike expects its gross margin — the difference between the price at which it buys and sells goods — to be down by 3.5 to 4.25 percentage points, including a 1 percentage point hit from tariffs, in the first quarter, compared with a 4.4 percentage point decline in the final three months. The company also looks to be ending its new product drought. The Vomero 18 shoe has generated more than $100 million in sales since its launch at the end of February. Meanwhile, the frenzy around the new hybrid loafer and sneaker, the Air Max Phenomena, has driven resale prices beyond $500 — even before its official release. That looks like a blast from Nike's past, when new models had sneakerheads salivating. Also evoking the kind of innovation that has been so sorely lacking is the Cryoshot, which reinterprets classic football boots for everyday dressing. It builds on the #bootsonlysummer TikTok trend of wearing soccer cleats in the street. For the past two and a half years, such foresight has largely belonged to Gulden. It's a welcome shift to see Nike finally riding a trend — rather than missing it, as it did with retro low-rise shoes. But Hill is far from the finish line. The delay in launching NikeSkims — the collaboration between the sportswear giant and Kim Kardashian 's shapewear company — looks like an own goal, especially given the hype around the tie-up. Of course, Hill wants to make such an important debut, right? However, the long gap between the February announcement and the product release seems unfortunate. It gives rivals like Lululemon Athletica Inc. time to spruce up their collections. The CEO also faces the challenge of Donald Trump 's tariffs. While no company is immune from the levies, they are especially unhelpful to retailers amid revival plans, such as Nike, Target Corp. and Gap Inc. Nike said it faced a cost — before any measures to mitigate the impact of tariffs — of about $1 billion. However, it aims to work with its suppliers and retail partners to offset some of the expense and will implement 'surgical' price increases beginning this fall. The last time sneaker makers encountered such a significant external challenge was four years ago, when Covid-19 lockdowns in Vietnam disrupted supply chains. At the time, Nike didn't struggle with demand — consumers were still clamoring for its sneakers. Today, however, it faces fierce competition not only from a resurgent Adidas but also from rising challengers like On Holding AG and Deckers Outdoor Corp.'s Hoka, which gained ground while Donahoe pursued his ill-fated strategy of selling directly through Nike's own stores and websites. As in the luxury sector, brands that remain highly desirable to consumers will be the ones able to raise prices. Through to Thursday's close, Nike shares are down about 34% over the past year, and about 23% since Hill's appointment in September. They trade at about 2 times the next 12 months' sales, compared with Adidas's 1.5 times. That premium will look too lofty until Hill can turn trying into victory. The views expressed are those of the author and do not necessarily reflect those of the publication or its affiliates. Andrea Felsted is a Bloomberg Opinion columnist covering consumer goods and the retail industry. Previously, she was a reporter for the Financial Times. with Reuters ($1 = £0.73)
RTÉ News
21 hours ago
- Business
- RTÉ News
Nike shares rally as turnaround takes shape amid tariff woes
Nike shares surged 10% in premarket trading today as an encouraging forecast and plans to reduce China production for US-bound goods bolstered confidence in an ongoing turnaround effort at the sportswear giant. Major US brands have spent years shifting away from Chinese factories as political tensions between Washington and Beijing escalated, but President Donald Trump's latest import tariffs are pushing companies to hasten their retreat. Nike plans to cut the percentage of US-bound goods made in China to a "high single-digit percentage range" by the end of May 2026. China currently accounts for about 16% of the shoes it imports into the United States. Trump's sweeping tariffs could also add around $1 billion to Nike's costs, executives said on Thursday, after the company posted its worst sales decline in roughly five years but gave a better-than-feared revenue forecast for the first quarter. "There was basically no profit, China was down 20%, that's not a good result... But as usual, the markets are pricing in what's coming and not what has been in the results," said Simon Jaeger, portfolio manager at Flossbach von Storch in Cologne, Germany, which holds shares in Nike. A lot of the focus was also on how Nike's running segment was bouncing back from a stretch of sluggish demand. The recovery was partly thanks to new CEO Elliott Hill's efforts to claw back market share in the running space with new launches. Nike has invested in running shoe and sneaker lines such as Pegasus and Vomero, and cut its stock of older models including the Air Force 1 and Air Jordan 1 through discounts. Hill is also looking to rekindle relationships with wholesale partners and expand its presence in more physical retailers as part of the wider revamp. "We think longer-term investors can now start to rotate back into the stock as one of the biggest potential turnarounds in consumer," analysts at Evercore ISI said in a note. Its results also helped shares of German peers Adidas and Puma and London-listed sportswear retailer JD Sports between 3% and 7%. "Nike executives also said they were nearly done with clearing out old inventory, which is a relief for Adidas, Puma, and JD Sports, who were having to compete with aggressive discounting from the bigger sportswear brand," Jaeger said. Nike shares are down 17.4% so far this year, while its 12-month forward price-to-earnings ratio is 1.90, compared with 1.58 and 0.64 for Adidas and Puma, respectively.
