Nike (NKE) earnings Q1 2025

Nike announced Tuesday that it is postponing its investor day as the company reported mixed first-quarter results and prepares for a new CEO to take the helm.

Last month, the company announced that CEO John Donahoe would step down in October and be replaced by long-time company veteran Elliott Smith. Given the impending CEO change, the company said in a press release that it would “discuss its approach to the guidance” in its conference call scheduled for 5:00 p.m. ET.

It was also said that the investor day originally planned for November would be postponed. It is unclear when the meeting will be rescheduled.

Here's how the world's largest sneaker retailer performed compared to Wall Street's expectations, based on an LSEG analyst survey:

• Earnings per share: 70 cents versus 52 cents
• Revenue: $11.59 billion versus $11.65 billion

The company's reported net income for the three-month period ended Aug. 31 was $1.05 billion, or 70 cents per share, compared with $1.45 billion, or 94 cents per share, a year earlier.

Revenue fell to $11.59 billion, down about 10% from $12.94 billion a year ago.

Over the past year, Nike has been accused of falling behind in innovation and giving up market share to rivals as it focuses on selling directly to consumers through its own websites and stores rather than through wholesalers such as. B. concentrated Foot Locker And DSW.

The company announced in September that Donahoe would step down and be replaced by company veteran Hill, who is expected to take the helm on Oct. 14.

Under Donahoe's leadership, the company grew annual sales by more than 31%, but achieved that goal by introducing legacy franchises like Air Force 1s, Dunks and Air Jordan 1s — not the groundbreaking styles that made the company a global powerhouse made.

In recent quarters, Donahoe has talked about the need to improve innovation and improve Nike's relationships with wholesalers, but the company's board decided that Hill, who spent 32 years at Nike before retiring in 2020, would be the right person to lead the next chapter.

Donahoe is expected to be present at the company's conference call with investors on Tuesday afternoon, but observers will be interested to see if there are any hints about where the company plans to go under Hill's leadership.

The new CEO must strengthen Nike's innovation pipeline, revamp relationships with wholesalers and improve morale after a series of layoffs and a breakdown in company culture.

Overall, the sneaker market in the USA was relatively stagnant. Consumer spending on consumer goods like new clothing and shoes has been sluggish, which has made Nike's situation even more difficult.

U.S. shoe sales are expected to grow just 2% in 2024 compared to 2023, after little change between 2022 and 2023, according to Euromonitor. The athletic footwear market is expected to grow about 5.6%, the company said.

Nike's performance was also weighed down by the uneven economy in China, Nike's third-largest market by revenue, which will be another key point to watch for in the earnings report. Nike's performance in China is often an indicator of the region's financial health, and in late June the company warned of a “weaker outlook” in the region. However, China's central bank recently unveiled its biggest stimulus measures since the Covid pandemic, which is expected to provide a much-needed boost to the region's economy.

Nike's fiscal first quarter would have ended before these stimulus measures, but executives could comment on how sales are trending in the current period.

Shares of Nike closed at $88.40 on Monday, down about 19% so far in 2024 and well below the S&P 500's gains of about 21%.