Nike Reports 44% Profit Decline and 10% Sales Drop Amid Ongoing 2024 Slowdown

Nike continues its moment of weakness. The U.S. company, which at the end of last year launched a shock plan after closing 2023 with the lowest increase in a decade, confirms its bad path with the results of 2024. The company, the world number one in the sports industry, closed the year with a 44% plunge in net income and a 10% drop in sales.

As reported last night by the swosh giant, the net result at the end of 2024 (ended last May) stood at $3.2 billion, compared to the $5.7 billion it earned in 2023.

Gross profit, meanwhile, fell by 14% in 2024 as a whole, to $19.7 billion. Gross margin declined 190 basis points to 42.7%, mainly due to increased discounting, changes in channel mix and higher inventory obsolescence reserves, partly offset by lower product costs.

Nike closed 2024 with net income of $3,2 billion

At the close of 2024, Nike’s sales had missed the $50 billion mark, falling from $51.3 billion in 2023 to $46.309 billion in the last fiscal year.

By brand, the biggest drop in 2024 as a whole was recorded by Converse, with a 19% decline, while the Nike brand shrank sales by 19%. In footwear, the driving force behind Nike’s sales, the group posted a 12% drop in sales, while the decline in apparel was 6%.

China is the region of the world where the Oregon-based giant has suffered the most, with sales down 13% in 2024 as a whole. In Europe, the group has shrunk sales by 10%; in North America, by 9%, and in Asia and Latin America, by 7%.

In the fourth quarter, the performance was even more severe: sales fell by 12% and net income by 86%

“While our financial results are in line with our expectations, they are not where we want them to be; going forward, we expect our business to improve as a result of the progress we are making with our Win Now actions (the new strategic plan),“ said Elliott Hill, the group’s chairman and CEO since the end of last year.

In the fourth quarter, Nike’s performance was even tougher. “The fourth quarter reflected the largest financial impact of our Win Now measures, and we expect the hurdles to moderate going forward,“ said Matthew Friend, Nike’s executive vice president and chief financial officer. In the final quarter of the fiscal year, Nike’s sales retreated 12% and net income fell 86%.

“As we begin a new fiscal year, we are turning the page and the next step is to align our teams to lead with sports through what we call the sports offensive,“ added the chief executive, who took the reins from John Donahoe after the accumulated underperformance.