Nike Digital, encompassing global sales through the retailer’s website and mobile app, decreased 10% in its fiscal Q4 2024.
The year ended on a positive note for Nike Inc. despite a year-over-year drop in quarterly revenue and digital sales during Q4 of its fiscal 2024.
Whereas Q4 revenue decreased about 2% from the same period a year earlier, Nike full-year revenue reached a new high in its fiscal 2024.
In an earnings call with investors, chief financial officer Matthew Friend attributed the decline in Nike Digital sales to “softer traffic, higher promotions and lower sales of certain classic footwear franchises.”
Although Nike Digital has grown at about a 26% compound annual growth rate (CAGR) since the retailer’s fiscal 2019, Friend said, the company missed its targets in its fiscal Q4. Nike Digital sales “underperformed” in April and May, continuing into June, he noted. This comes as Nike continues “to drive retail sales growth at a high full-price realization,” Friend added.
Friend had said in Q3’s earnings call that Nike’s target has been “to achieve the 40% digital metric.” So far, Nike has not disclosed how far along it is toward hitting that share of sales through digital channels.
In the earnings call, president and CEO John Donahoe said Nike is “taking our challenges head on and we’re regaining our edge.”
Nike ranks No. 8 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers by online sales. It’s also the highest-ranking Apparel/Accessories retailer in the Top 1000.
Total Nike revenue in fiscal 2024
For its full 2024 fiscal year, Nike revenue totaled $51.4 billion. That’s up 1% year over year from $51.2 billion. The full-year revenue growth comes despite a 2% year-over-year dip in Q4 Nike revenue, to $12.6 billion.
With the exception of the first COVID-19 pandemic year, 2020, Nike has grown its annual revenue in each year since 2011.
Total Nike revenue fell to about $12.61 billion in its Q4, which ended May 31, 2024. That’s down from about $12.83 billion in the year-ago period. This marks the fourth year-over-year drop in Nike revenue in a quarter since Q1 of the retailer’s fiscal 2019.
It’s the third such drop to happen in the retailer’s Q4 in that time frame — the first of which was at the onset of the COVID-19 pandemic in 2020. Moreover, Q4 2021 rebounded to outperform the same period in the two prior years.
The only non-Q4 drop in the past five years was Q1 FY21, though the drop was moderate (less than $100 million) compared to the Q4 FY20 drop of about $4 billion. That was the second quarter to have been affected by the pandemic.
Before Q4 this year, the last year-over-year drop in Nike revenue was in Q4 of its fiscal 2022.
Revenue from Nike’s namesake brand accounted for $12.1 billion of the company’s $12.6 billion total revenue across brands, which include the Jordan brand and Converse.
Nike Digital sales drop again in Q4
Nike Digital, encompassing global sales through the retailer’s website and mobile app, decreased 10% in Q4. That follows a 4% year-over-year decline in Q3 Nike Digital sales.
Similarly, Nike Direct revenue fell 8% year over year, to $5.1 billion. Nike Direct refers to the retailer’s direct-to-consumer sales, both in physical stores and online. On the opposite end, Nike wholesale revenue increased 5% year over year, to $7.1 billion, in Q4.
In North America, Nike Digital sales decreased 11% in Q4. Meanwhile, Nike store sales decreased 5% while wholesale grew 6% in the region.
In Europe, the Middle East and Africa (EMEA), Nike Digital sales declined 14% in Q4. Nike Digital sales also declined in Asia-Pacific and Latin America (APLA), down 12% while wholesale grew 9%. However, Nike Digital sales in greater China grew 8% in the quarter; wholesale grew 15% while in-store sales dropped 6%.
Nike outlook for fiscal 2025
Nike expects Q1 fiscal 2025 revenue to decline about 10%, Friend said. That includes lower Nike Digital growth, “especially in the first half of the year due to lower traffic on fewer launches.”
“This reflects more aggressive actions in managing our classic footwear franchises, continuing challenges on Nike Digital, muted wholesale order books with newness not yet at scale, a softer outlook in greater China, and a number of quarter-specific timing factors,” he said.
Written by: Abbas Haleem @DigitalCommerce360
The post “Nike Digital sales drop in Q4 as retailer reaches highest-yet annual revenue” first appeared on DigitalCommerce360.com
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