NIKE(US:NKE) Huan Qiu Wang·2025-06-28 02:12Core Viewpoint - Nike reported a decline in revenue and net profit for Q4 of fiscal year 2025, but results exceeded analyst expectations, indicating a potential recovery strategy in place [1][2]. Financial Performance - Revenue for the quarter was $11.1 billion, down approximately 12% from $12.61 billion year-over-year, but better than the expected $10.72 billion [1]. - Net profit fell to $211 million, an 86% decrease compared to the previous year, with earnings per share at $0.14, down from $0.99 but above the forecast of $0.13 [1][2]. Strategic Adjustments - The significant profit drop was attributed to Nike's efforts to clear excess inventory and regain favor with wholesale partners, shifting focus back to wholesale sales which typically yield lower margins compared to direct sales [2][3]. - CEO Elliott Hill emphasized a strategic shift to "turn a new page," focusing on revitalizing relationships with wholesale partners and realigning the business towards sports products rather than lifestyle items [3]. Future Outlook - Nike anticipates that the worst may be over, although new challenges such as tariffs are emerging, with an estimated increase in total incremental costs of about $1 billion for fiscal year 2026 due to new tariff rates [4]. - The company expects revenue for the upcoming quarter (Q1 of fiscal year 2026) to decline in the mid-single digits percentage range, aligning with analyst expectations of a 7% drop, and anticipates a decrease in gross margin by 3.5 to 4.25 percentage points, including a 1 percentage point drop due to tariffs [4].