Nike withdrew its annual revenue forecast on Tuesday and missed quarterly revenue estimates due to sportswear giants’ battle Weak demand for footwear amid tough competition from new brands globallysending its shares down 6% after hours.
It had previously forecast a decline in annual revenue in the mid-single-digit percentage range.
The company is yet to deliver sales benefits from its drive to fast-track innovation with the launch of new product ranges like Air Max DN and Pegasus 41 to revive demand.
Analysts also say Nike has done little to drive demand and take back market share from brands like Deckers Hoka and Roger Federer endorsed on Mainly in the United States and Europe.
The sportswear giant was hit by a slowdown in consumer spending in China, which led to a 3% decline in the Greater China region. Sales in the US and Europe fell 14%.
The company’s first-quarter net revenue fell 10.4% to $11.59 billion. Analysts had expected a 10% decline to $11.65 billion, according to analysts’ estimates compiled by LSEG.
However, Nike reported a 120 basis point increase in gross margin to 45.4% driven by its efforts to cut costs through layoffs and reduce supply of some underperforming products.
First-quarter profit of 70 cents per share beat estimates of 52 cents, according to analysts’ data compiled by LSEG.
Nike said in September that company veteran Elliot Hill, who was at Nike for 32 years before retiring in 2020, Will take charge as new CEO on October 14Tasked with restoring sales growth and winning back market share.
Under Hill’s leadership, analysts expect Nike to make a fresh start and rebuild wholesale partnerships that were diminished under outgoing CEO John Donahoe.
While Donahoe focused on increasing sales through the company’s own stores and website, American retailers such as Foot Locker and Dick’s Sporting Goods quickly filled the shelf space vacated by Nike with fashionable competitors such as On, Hoka and New Balance. Filled with.
Nike said Tuesday it has postponed its investor day, originally scheduled for Nov. 19.
Dave Wagner, head of equities, said, “I’m very disappointed with the revenue numbers here… This is not a great report by any stretch of the imagination from a quantitative standpoint, but also from a qualitative standpoint of canceling investor day.” Aptus Capital Advisors, which has a stake in Nike.
