Nike Earnings: Swoosh Stock Soars Despite Revenue Miss

Nike didn’t quite hit its expected revenue mark, but its latest earnings report provides plenty of reasons for excitement in Beaverton.

While Nike narrowly missed on its expected revenue for the first time in two years, its 2024 Q1 fiscal earnings report was still a net positive. In fact, it shattered expectations so greatly that the company’s stock price went up 8% in after hours trading on Thursday and tacked on an additional 5% on Friday.

While sales are up 2% year-over-year to $12.94 billion, it was just short of the $12.98 billion analyst expectation. But earnings of 94 cents a share destroyed the 75 cent expectation, sending the Swoosh stock soaring. Its gross margin of 44.2% is higher than the 43.7% estimate, but slightly lower year over year from 44.3%.

Though Nike inventory fell 10% year over year to $8.7 billion — lower than expectations — the Oregon-based sneaker brand was boosted by direct-to-consumer sales and a Chinese market still recovering from post-pandemic lockdowns. DTC sales are up 6% from last year to $5.4 billion, and Chinese revenue was up 5% year-over-year to $1.7 billion, still short of $1.8 billion expectations. That’s also a slower growth trajectory than the quarter ending May 31, when Nike reported 16% YoY growth in the region.

“We feel good about the market there and our position,” CEO John Donahoe said. “Frankly, a couple things stand out. One, sport is back in China, you can just feel it, and that gives us great confidence about the future and the Chinese consumer in our segment, regardless of the macroeconomic outlook there.”

Other key notes that stood out:

Revenue increased in every region except North America, which fell 2% year-over-year, but still beat analyst expectations. Sales were up 8% in Europe, the Middle East, and Africa.
Converse is currently struggling, with sales down 9% year-over-year to $588 million, short of $660 million expectations.
With wholesale revenue flat and inventory still high, Nike renewed relationships with stores like Macy’s and DSW that it previously cut in efforts to focus on DTC.