The 2025 fiscal year is starting in the red for sports giant Nike. In September, the company announced a change at the top management: John Donahoe, who has been leading the company since 2014, will be followed from October 14, 2024 by Elliot Hill, who already held various management positions before retiring in 2020. Donahoe will leave the company on October 13, 2024.
For the first quarter of 2025, Nike recorded a sales decline of 10% (9% at constant currencies) to a total of 11.6 billion US dollars. Nike Direct’s D2C channel revenue is $4.7 billion, down 13% (12% at constant currencies), while wholesale sales are down 8% (7% at constant currencies) to $6.4 billion. US dollar fell. Converse brand sales fell 15% (14% at constant currencies) to $501 million. Diluted earnings per share in the first quarter were $0.70, a decrease of 26%.
“NIKE’s first quarter results largely met our expectations. A comeback of this magnitude takes time, but we are starting to see results – from building momentum in key sports to accelerating our pace of novelty and innovation,” said Matthew Friend, Executive Vice President and Chief Financial Officer of Nike. “Our teams are energized as Elliott Hill returns to lead Nike’s next phase of growth.”
Gross margin increased 120 basis points to 45.4%. Nike explains this with lower production costs, for example in the areas of warehousing and logistics, as well as “advantages from strategic pricing measures from the previous year”. Selling and administrative expenses fell 2% to $4.0 billion, while marketing expenses increased 15% to $1.2 billion. The effective tax rate was 19.6%, compared to 12.0% in the previous year.
Net income was $1.1 billion, down 28% from last year. Diluted earnings per share were $0.7 in the first quarter, a decrease of 26%.
