[ad_1]
An employee carries shoe boxes at the Footlocker retail store at Barton Creek Square shopping center on August 28, 2024 in Austin, Texas.
Brandon Bell | Getty Images
Nike will report quarterly results on Tuesday as investors brace for another round of less-than-stellar results. The company announced last month that CEO John Donahoe would step down.
Here’s what analysts expect from the world’s largest sneaker company for its fiscal first quarter 2025, according to LSEG consensus estimates:
- Earnings per share: 52 cents
- Income: $11.65 billion
Analysts expect sales to fall 10% from last year and profits to fall nearly 45%.
This gloomy outlook comes amid a reset at Nike. Over the past year, it has been accused of falling behind in innovation and ceding share to rivals as it has focused on selling direct to consumers through its own websites and stores instead. only through wholesalers like Foot locker And DSW.
In September, Nike announced that Donahoe would step down and be replaced by Elliott Hill, a longtime company veteran, who is expected to take the helm on October 14.
Under Donahoe’s leadership, the company grew its annual sales by more than 31 percent, but it did so by producing historic franchises like Air Force 1s, Dunks, and Air Jordan 1s — not the revolutionary styles that transformed the company into a global powerhouse.
In recent quarters, Donahoe has talked about the need to improve innovation and improve its 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 his next group. chapter.
Donahoe is expected to be present during the company’s conference call with investors Tuesday afternoon, but observers will be eager to see if there are any clues as to the direction the company plans to take under Hill’s leadership.
The new CEO will need to boost Nike’s innovation pipeline, reset its relationships with wholesalers and improve morale after a series of layoffs and a culture breakdown.
Overall, the sneaker market has remained relatively stagnant in the United States. Consumer spending on discretionary goods like new clothing and shoes has been slow, making Nike’s situation even more difficult.
U.S. shoe sales are expected to grow just 2% this year compared to last year, after barely budging between 2022 and 2023, according to Euromonitor. Athletic footwear is expected to grow around 5.6%, the company said.
Nike’s performance was also hampered by the uneven economy in China, Nike’s third-largest market by revenue, which will be another key element to watch in Nike’s 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 “more subdued outlook” in the region. However, China’s central bank recently unveiled its biggest stimulus measures since the Covid pandemic, which are expected to give the region’s economy a much-needed boost.
Nike’s fiscal first quarter would have ended before these stimulus measures, but executives can share their thoughts on how sales have fared in the current period.
Nike stock closed at $88.40 on Monday, down about 19% year to date, significantly underperforming the S&P 500’s gains of about 21%.