Nike shares fall as company pulls back guidance amid CEO change

Shares of Nike ( NKE ) fell about 5% after hours Tuesday night, when the company reported fiscal first-quarter revenue that missed estimates and withdrew its outlook for the year amid a CEO transition.

The shoe giant reported first-quarter earnings per share of $0.70, topping Wall Street’s estimate of $0.52 and down 26% from the year-ago period. Meanwhile, Nike’s revenue of $11.59 billion was below analysts’ estimates of $11.65 billion and marked a 10% decline from the year-ago period.

Nike saw sales decline in both its direct-to-consumer business and its wholesale division. Nike Direct revenue was $4.7 billion, down 13 percent from the same quarter a year ago. Meanwhile, wholesale revenue was $6.4 billion, down 8 percent from the same period a year ago.

“A comeback on this scale takes time, and while there are some early wins, we have yet to turn the corner,” Nike CFO Matthew Friend said on the company’s earnings call Tuesday night.

Morningstar equity analyst David Swartz told Yahoo Finance that Nike’s report was “pretty much what people expected.”

“Nike really warned us from late last year, December 2023, that the athletic apparel market wasn’t very strong and that its innovation cycle wasn’t looking particularly good for the start of fiscal 2025 either,” Swartz said. “Right now, Nike is in a situation where they don’t have a lot of new products coming out and they’re pulling back from other products.”

The quarterly report is Nike’s first since the company announced a CEO change amid weak sales growth. Elliott Hill, a former Nike executive who retired in 2020, will replace John Donahoe as CEO on October 14. The news initially sent Nike stock down as much as 10%.

Shares of Nike have slumped this year, falling more than 25% ahead of the CEO change announcement on Sept. 19, amid concerns about slowing sales growth and pressure from growing competitors in the space such as brand On ( ONON ) and Deckers (DECK) Hoka.

“This sportswear industry is much more competitive now than it was five years ago,” Swartz said. “Donahoe didn’t get that until it was a little too late.”

Friend said Nike expects revenue to fall in a range of 8 percent to 10 percent for the current quarter, weaker than Wall Street’s initial expectation of a 6.7 percent decline.

“Revenue expectations have moderated since the start of the year given traffic trends on Nike, digital retail trends in the marketplace and final spring orders,” Friend said.

The story continues

Tuesday’s print marked the sixth straight quarter Nike reported single-digit revenue growth or worse. The company also announced Tuesday that its next investor day has been postponed, with no further date announced.

In a note to clients Monday morning, Jefferies analyst Randal Konik wrote that he doesn’t expect Hill to impact Nike’s performance until fiscal 2026. Therefore, Konik sees the stock as “in no man’s land and likely remain limited in range”. for a number of quarters”.

Josh Schafer is a reporter for Yahoo Finance. Follow X @_joshschafer.

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