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Shares of Nike Inc. dropped on Thursday afternoon after the company reported sales results that fell short of expectations.

For the fourth quarter, the athletic giant reported that revenues were down 2 percent to $12.6 billion over the same quarter last year, short of the $12.84 billion expected by analysts surveyed by Yahoo Finance and short of its prior guidance. Net income was up 45 percent to $1.5 billion and diluted earnings per share was 99 cents, which included a loss of 2 cents per share of restructuring charges. This was ahead of the 83 cents expected by analysts.

According to a statement from Nike chief financial officer Matthew Friend, Nike’s Q4 results “highlighted challenges” that led the company to “update” its outlook for fiscal year 2025. In a call with analysts, Nike president and chief executive officer John Donahoe said that declines in lifestyle sales as well as uncertain macroeconomic conditions caused the company to cut its guidance for fiscal year 2025.

“A comeback at this scale takes time” Friend said in a call with analysts.

Nike now expects revenues for fiscal year 2025 to be down in the mid single digits, with revenues for the first half of the year down in the high single digits. In Q1, revenue is expected to be down 10 percent, reflecting muted wholesale order books, a softer outlook in China, as well as other factors.

Nike shares were down more than 5 percent in the hour after markets closed on Thursday.

By brand, Nike brand revenues were down 1 percent to $12.1 billion in Q4, driven by growth in Greater China, APLA and EMEA, and offset by declines in North America. Converse brand sales declined 18 percent to $480 million. By channel, Nike direct revenues were down 8 percent to $5.1 billion, driven by digital and store declines. Wholesale was up 5 percent to $7.1 billion.

Market watchers have recently become increasingly skeptical of Nike’s performance as it continues to lose share in crucial categories like running. In December, Nike announced new measures to “streamline” its organization to save up to $2 billion in costs over the next three years by implementing layoffs, simplifying product and increasing automation. Nike also announced a new innovation pipeline after it was criticized for its lack of innovative products.