Customers shop at a Nike store at an outlet mall in Los Angeles on November 8, 2024.
Frederic J. Brown | Frederic J. Brown AFP | Getty Images
Nike On Thursday, the company will report fiscal second-quarter earnings, the first under new CEO Elliott Hill, who is expected to lay out a strategy to turn around ongoing sales declines. early strategy.
Here’s what analysts expect from the world’s largest sneaker company, according to consensus estimates from London Stock Exchange Group (LSEG):
- Earnings per share: 64 cents
- income: US$12.18 billion
Analysts expect sales to be down more than 9% from a year ago and profits to be down about 38%.
The gloomy outlook comes as Nike is working to turn around its business and revamp its product offerings by withdrawing three of its key franchises: the Air Force 1, Dunks and Air Jordan 1. These styles dominated Nike’s lineup under former CEO John Donahoe, but have since become so ubiquitous that they’ve lost their coolness. Now Nike is trying to reduce supply.
Nike warned that the strategy would put pressure on sales in the short term. But it also affected Foot Locker, which missed Wall Street expectations for revenue and profit in its third-quarter report on Dec. 4, CEO Mary Dillon told CNBC at the time, in part. It’s the weak demand for Nike’s products.
Foot Locker’s dismal quarterly results are a warning sign for Nike and a sign that investors may need to be patient as they wait for the sneaker giant to turn around its business. When Nike reports earnings on Thursday, Hill will have been in his new role for just over two months, and it will take time to see the effects of the change in strategy.
Elliott Hill, President and CEO, Nike
Courtesy: Nike
Hill has a lot of work to do besides fixing Nike’s product lineup. He needed to bolster Nike’s innovation pipeline, realign relationships with wholesalers and boost morale after a series of layoffs and a cultural collapse.
He has had some wins since taking over. The National Football League announced on December 11 that it had renewed its contract with Nike after briefly courting other bidders. The NFL’s decision to extend Nike’s contract through 2038 is a major vote of confidence at a time when it has been criticized for lagging on innovation and failed MLB uniform launches.
Today, Nike is the exclusive uniform supplier to the NFL, MLB and NBA.
Shares of Nike were down about 27% in 2024 as of Wednesday afternoon, while the S&P 500 was up about 27%.
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