Nike has reported a double-digit sales decline for the last fiscal year, with management expecting improvements this year thanks to its ongoing growth strategy and easing headwinds.

The company’s revenues for the year ended May 31 fell 10 per cent to US$46.3 billion (down 9 per cent on constant currency).

The Nike brand saw a 9 per cent sales decline to US$44.7 billion, driven by declines across all markets. Sales at Converse slid 19 per cent to $1.7 billion

On the bottom line, net income contracted 44 per cent to US$3.2 billion.

“While our financial results are in-line with our expectations, they are not where we want them to be,” said president and CEO Elliott Hill.

“Moving forward, we expect our business to improve as a result of the progress we’re making through our Win Now actions.”

Hill added that the company is “turning a new page” in the new fiscal year, with a focus on driving distinction within key sports, building a complete product portfolio, enhancing product storytelling, and growing the entire marketplace.  

For the fourth quarter, sales were down 12 per cent to US$11.1 billion and net income plunged 86 per cent to $200 million. 

“The fourth quarter reflected the largest financial impact from our Win Now actions, and we expect the headwinds to moderate from here,” added CFO Matthew Friend. 

Reduce reliance on China production

Nike plans to cut its reliance on production in China for the US market to mitigate the impact from US tariffs on imports, Reuters reported, citing the company management during a post-earnings call.

China currently accounts for about 16 per cent of the shoes Nike imports into the US, and the company aims to cut the figure to a “high single-digit percentage range” by the end of next May as it reallocates China production to other countries.

“We will optimise our sourcing mix and allocate production differently across countries to mitigate the new cost headwind into the US,” said CFO Matthew Friend. 

The company will “evaluate” corporate cost reductions to deal with the tariff impact, he added. 

The news sent Nike’s shares up 11 per cent in extended trading on Thursday.

The sports giant forecasts its first-quarter revenue to fall in the mid-single digits, slightly better than analysts’ expectations of a 7.3 per cent drop.