Nike withdraws annual revenue forecast, shares drop 6%
Sign up now: Get ST's newsletters delivered to your inbox
The sportswear giant's overall net revenue declined 10.4 per cent to US$11.59 billion (S$15 billion).
PHOTO: REUTERS
NEW YORK – Nike shares dropped 6 per cent after hours on Oct 1 as the company withdrew its annual revenue forecast and postponed its investor day, weeks before a new chief executive takes the helm to steer the sportswear giant through an ongoing strategy reset.
“We are withdrawing our full-year guidance... This provides Elliott the flexibility to... evaluate the current strategies and business trends and develop our plans to best position the business for fiscal 2026 and beyond that,” Nike chief financial officer Matthew Friend said.
Nike had earlier forecast a mid-single-digit percentage range decline in annual revenue.
Mr Elliott Hill, who was at Nike for 32 years before retiring in 2020, will take over on Oct 14 and is expected to help the company begin from scratch and rebuild wholesale partnerships that had tapered under outgoing CEO John Donahoe.
Mr Donahoe’s focus on bolstering sales through the company’s own stores and website had led US retailers such as Foot Locker and Dicks Sporting Goods to quickly fill the shelf space Nike had vacated with fashionable competitors like Roger Federer-backed On, Hoka and New Balance.
The company is yet to see sales benefits from its drive to fast-track innovation with the launch of new product lines such as Air Max Dn and Pegasus 41 to revive demand.
Its footwear sales in the US and Europe dropped 14 per cent each in the first quarter, while Greater China fell 3 per cent.
Overall net revenue declined 10.4 per cent to US$11.59 billion (S$15 billion). Analysts had expected a 10 per cent fall to US$11.65 billion, according to estimates compiled by the London Stock Exchange Group (LSEG).
“I am pretty disappointed by the revenue number here... this is not a great report whatsoever by any stretch of the imagination from a quantitative standpoint, but also from a qualitative standpoint of cancelling the investor day,” said Mr Dave Wagner, head of equities at Aptus Capital Advisors, which has a stake in Nike.
Nike’s investor day was earlier scheduled for Nov 19.
But the company reported a 120-basis-point jump in gross margins to 45.4 per cent, thanks to attempts to cut costs through layoffs and reducing supply of some underperforming products.
First-quarter profit per share of 70 US cents also beat estimates of 52 US cents, according to analysts’ data compiled by LSEG. REUTERS
