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Nike announced on Tuesday that it was withdrawing its full-year guidance and postponing its investor day in preparation for a new CEO to take over. Last month, the company revealed that CEO John Donahoe would be stepping down and replaced by Elliott Hill. As a result of the impending CEO change, Nike decided to withdraw its full-year guidance and provide quarterly guidance for the rest of the year.

During the fiscal fourth-quarter results announcement in June, Nike lowered its guidance for fiscal 2025, citing declining sales expectations due to various factors such as traffic trends on Nike Digital and retail sales across the marketplace. The company now expects revenue for the current quarter to decrease between 8% and 10%, with gross margin down approximately 1.5 percentage points.

Shares of Nike dropped about 5% in extended trading following the news and after delivering mixed results for its fiscal first quarter. The company reported earnings per share of 70 cents, surpassing analyst expectations of 52 cents, while revenue came in slightly lower at $11.59 billion compared to the expected $11.65 billion.

Nike has faced criticism for falling behind on innovation and losing market share to competitors as it shifted its focus to direct sales through its own channels rather than wholesalers like Foot Locker and DSW. Sales for legacy franchises such as Air Force 1s, Dunks, and Air Jordan 1s have declined, leading the company to reevaluate its product assortment and innovation strategy.

The company’s wholesale revenue declined by 8% in the fiscal first quarter, reflecting a competitive multi-brand environment and cautious ordering by wholesalers. Nike’s performance in China, its third-largest market, has also been impacted by a challenging consumer environment, although recent stimulus measures are expected to support the region’s economy.

Overall, Nike’s financial performance has been under pressure, with shares down approximately 18% in 2024, contrasting with the S&P 500’s gains. The company continues to navigate challenges in the market and adjust its strategies to drive growth and innovation moving forward.

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