Nike Inc (NYSE:NKE) stock fell 6.10% (As on March 21, 11:21:27 AM UTC-4, Source: Google Finance) after the company’s fiscal fourth-quarter revenue estimate came in below analysts’ expectations. Overall quarterly sales fell as Nike grappled with weakness in North America and China. North America sales dropped by 21% from a year ago to $1.1 billion from a year earlier, while revenue in greater China slumped by 42% to $421 million. However, the company posted a smaller-than-expected drop in quarterly revenue, benefiting from a holiday season bump and an uptick in demand for its new Pegasus Premium and Vomero 18 sneaker lines. The sportswear giant has discounted key lifestyle franchises Air Jordan 1, AirForce 1 and Dunk as it looks to clear out old inventory and focus on innovation. That sweetened the pot for buyers, who had waited all year to splurge during the holiday season. Newly launched sneakers, fast-tracked by new CEO Elliott Hill, also performed well enough to give the sportswear maker some breathing room after several quarters of weak demand.

Nike’s $2 billion savings plan including job cuts, tightening the supply of some products and reducing management layers helped it report a quarterly profit per share of 54 cents, beating the analysts’ estimates for the adjusted earnings per share of 29 cents. The company had reported the adjusted revenue decline of 9 percent to $11.3 billion in the third quarter of FY25, beating the analysts’ estimates for revenue of $11.02 billion. NIKE Direct revenues were $4.7 billion, down 12 percent on a reported basis and down 10 percent on a currency-neutral basis, primarily due to a 15 percent decrease in NIKE Brand Digital and a 2 percent decrease in NIKE-owned stores. Wholesale revenues were $6.2 billion, down 7 percent on a reported basis and down 4 percent on a currency-neutral basis. Revenues for Converse were $405 million, down 18 percent on a reported basis and down 16 percent on a currency-neutral basis, due to declines across all territories. Gross margin decreased 330 basis points to 41.5 percent, primarily due to higher discounts, higher inventory obsolescence reserves, higher product costs and changes in channel mix, partially offset by restructuring charges in the prior year.

The sales during the fourth quarter are tipped to decline in the mid-teens percentage range. Analysts have been expecting a decrease of 12.22% to $11.07 billion, according to LSEG data. In addition, an ongoing effort to clear out unsold inventory by offering discounts on older items could dampen fourth-quarter returns.