Nike offered mixed results in its first earnings call since announcing that its CEO John Donahoe would step down and be replaced by Elliott Hill.
In addition to announcing results for the first quarter, the athletic giant said it would postpone its widely anticipated Investor Day, which was scheduled for Nov. 19, 2024. A new date has not yet been released. The company also withdrew its guidance for fiscal year 2025.
Shares of Nike were down more than 6.5 percent in after hours trading on Tuesday.
For the first quarter, Nike reported that revenues were down 10 percent to $11.59 billion over the same quarter last year, short of the $11.65 billion expected by analysts surveyed by Yahoo Finance. Net income was down 28 percent to $1.1 billion and diluted earnings per share was 70 cents, which represented a 26 percent decline. This was ahead of the 52 cents expected by analysts.
Nike chief financial officer Matthew Friend said in a statement that Nike’s Q1 results “largely met” expectations and that there are already signs for future recovery.
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“A comeback at this scale takes time, but we see early wins — from momentum in key sports to accelerating our pace of newness and innovation,” Friend said. “Our teams are energized as Elliott Hill returns to lead Nike’s next stage of growth.”
Despite a generally positive reaction to the CEO news, analysts have broadly taken a conservative view of the stock, pointing out that big picture challenges persist for Nike. Some suggested in the last few weeks that Nike could further cut its guidance for the 2025 fiscal year as it implements a longterm turnaround plan.
Given the CEO shift, Nike withdrew its guidance for the year and will provide quarterly guidance throughout 2025, Friend said in a call with analysts. This approach is mean to help Hill embed in the company and determine how to reposition the brand for 2026. In June, Nike cut its fiscal year 2025 guidance and said it expected revenues for the year to be down in the mid single digits, with revenues for the first half of the year down in the high single digits.
Though Nike declined to give specific guidance for the year, Friend said that the brand’s revenue expectations have “moderated” due to digital and retail sales trends. Q2 revenues are expected to be down between 8 and 10 percent.
By brand, Nike brand revenues were down 10 percent to $11.1 billion in Q1, driven by declines across all geographies. Converse brand sales declined 15 percent to $501 million. By channel, Nike direct revenues were down 13 percent to $4.7 billion. Wholesale was down 8 percent to $6.4 billion.
