Shares of Nike ( NKE ) fell about 5% in premarket trading on Wednesday, after the company reported fiscal first-quarter revenue that missed estimates and scaled back its outlook for the year amid a CEO shakeup.
The shoe company reported first-quarter earnings of $0.70 per share, beating Wall Street’s estimate of $0.52 and a 26% decline from a year earlier. Meanwhile, Nike’s revenue of $11.59 billion fell short of analyst estimates of $11.65 billion and marked a 10% decline from a year earlier.
Nike saw sales decline in both its direct-to-consumer business and its wholesale division. Nike’s direct revenue was $4.7 billion, a 13% decline from the same quarter a year ago. Total sales revenue was $6.4 billion, down 8% from the same period a year ago.
“It will take time to come back at this level, and despite some early success, we haven’t turned the corner yet,” Nike CFO Matthew Friend said on the company’s earnings call Tuesday night.
Morningstar equity analyst David Schwartz told Yahoo Finance that Nike’s report was “what people expected.”
“Nike has been warning since late last year, December 2023, that the sports apparel market is not very strong and that its innovation cycle is not good at the start of fiscal 2025,” Schwartz said. “Right now, Nike is in a situation where a lot of new products aren’t coming out, and it’s taking back some other products.”
It was Nike’s first quarterly report since the company announced a CEO change amid sluggish 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 shares up 10%.
Nike stock has slumped this year, falling more than 25% ahead of the CEO change announcement on Sept. 19, amid concerns about sales growth and pressure from emerging rivals in the space, such as On ( ONON ) and Deckers’ ( DECK ) Hoka brand.
“The industry in sportswear is much more competitive now than it was five years ago,” Schwartz said. “Donahoe didn’t realize that until it was a little too late.”
Nike expects revenue to fall 8% to 10% in the current quarter, weaker than Wall Street’s initial expectations of a 6.7% decline, Friend said.
“Revenue expectations have moderated since the start of the year, given Nike’s traffic trends, digital retail trends across the market and final order books for spring,” Friend said.
Nike reported single-digit revenue growth or worse for the sixth straight quarter printed on Tuesday. The company announced on Tuesday that its upcoming investor day has been postponed to an unannounced future date.
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. As such, Konik believes stocks are “no man’s land and limited.” For several quarters.”
Josh Shaffer is a Yahoo Finance reporter. Follow him on X @_joshschafer.
Click here for an in-depth analysis of the latest stock market news and events that move stock prices
Read the latest financial and business news from Yahoo Finance
