Nike Reports Decline in Revenue and Lowers Guidance Amid DTC Strategy Reevaluation
![Nike Reports Decline in Revenue and Lowers Guidance Amid DTC Strategy Reevaluation](https://ptcz.blob.core.windows.net/monitoringtrademark/news/US020724D.png
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Nike's fourth-quarter and full-year financial results fell short of expectations, with Q4 revenue dropping 2% to $12.6 billion and annual revenue remaining flat at $51.4 billion. CEO John Donahoe acknowledged the need for adjustments, particularly in the company's direct-to-consumer (DTC) strategy, which saw an 8% decline in Q4. While wholesale revenue grew modestly, the company cut its guidance, anticipating mid-single-digit sales declines for the coming year. Analysts attributed part of Nike's struggles to an overemphasis on DTC sales, which alienated third-party retailers and opened opportunities for competitors. Additionally, a lag in product innovation has hurt Nike's performance, though the company is accelerating its development cycle to regain competitiveness. Despite challenges, some strong results in performance categories provided a silver lining. Nike's revenue is up nearly 24% from 2019, but it lags behind market growth and rival advancements, highlighting the brand's current sluggishness. The chart below shows the global revenue of Adidas, Nike, and Puma from 2006 to 2023 (in billion euros).