Nike shares plunge as revenue target, investor day scrapped
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The news: Nike shares dropped by as much as 8.3% after the company withdrew its annual revenue target, leaving investors uncertain about the timeline for the company’s turnaround.
The numbers: The shoemaker reported 10% lower revenues in the first quarter of fiscal 2025 when compared to the previous year, even as it increased promotions to help drive sales.
Shares fell as much as 8.26% on Wednesday to an intraday low of USD81.77 each, before paring losses to be down 7% in late morning. The stock had regained 10% since Hill's appointment in September, after losing more than a third of its value over the past 12 months.
The context: Incoming CEO Elliott Hill is taking over on 14 October and has been given flexibility to reassess Nike’s strategies. But investors were disappointed as Nike cancelled its 19 November investor day.
The company has been facing pressure from competitors, particularly in high-performance running shoes from On Holding and Hoka.
CFO Matthew Friend said Nike needed to offer deeper discounts to drive sales last quarter and warned of a weaker holiday season.
What they said: "NIKE's first quarter results largely met our expectations,” Friend said in a statement. “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. Our teams are energized as Elliott Hill returns to lead NIKE's next stage of growth."
"Just how quickly a turnaround can happen is up in the air ... There's not anything really that I could say at this point gives us a definite timeline or early hints to what is in store for the future," Jessica Ramirez, an analyst at Jane Hali & Associates, told Reuters.
Bernstein Societe Generale analysts wrote in a note: "Nike is deep in the abyss of the turnaround… Early signs of market traction look positive, but can't translate into hard numbers yet while markdown actions drag down sales and margins."
The sources: Nike release , Reuters
