Nike Forecasts Steeper Q4 Revenue Drop Despite Strong New Sneaker Launches

Nike (NYSE: NKE) shares dipped nearly 5% in after-hours trading on Thursday after the company forecasted a sharper-than-expected revenue decline for the fourth quarter. CFO Matthew Friend projected a mid-teens percentage drop, exceeding analyst expectations of a 12.22% decline to $11.07 billion, according to LSEG data.

While third-quarter results beat Wall Street estimates—posting $11.27 billion in revenue (down 9%) and earnings per share of $0.54 (a 30% drop)—investors grew cautious after the outlook. Nike’s new sneaker models like the Pegasus Pro and Vomero 18 performed well, offering a glimmer of hope under new CEO Elliott Hill’s leadership.

However, the company still faces headwinds, particularly in China, where Q3 sales fell 17% amid economic uncertainty and a prolonged property slump. Europe also showed weak performance. Hill’s “Win Now” strategy aims to rejuvenate Nike’s core sportswear business and strengthen ties with retailers, especially in key cities like Shanghai, Beijing, Los Angeles, New York, and London.

To spark demand, Nike increased marketing efforts, including its first Super Bowl ad in 27 years featuring WNBA rising star Caitlin Clark. Despite new launches showing promise, the company continues to discount legacy lines like Air Jordan 1 and Air Force 1 to clear old inventory, pressuring gross margins, which fell 330 basis points to 41.5%.

Analysts believe Nike’s turnaround will take time, especially as competition from trendier brands like On and Hoka intensifies. Still, signs that new products are resonating with consumers offer hope for a long-term recovery. Nike expects revenue moderation beyond Q4 as it rebuilds retailer partnerships and streamlines inventory.