The American clothing and sports equipment group Nike, in the midst of a management transition, announced on Tuesday declining results in the first quarter of its delayed financial year, but which better or equal consensus expectations.
Between June and August, Nike reported revenue that rose 10% year-over-year to $11.6 billion, matching FactSet’s consensus forecast.
On the other hand, it did better in terms of net profit since it just exceeded one billion dollars (1.05 billion) when analysts had anticipated 783 million. But it has fallen by 28% over one year.
Net profit stood at 70 cents, a response of 26% year-on-year. But that’s higher than the 52 cents consensus.
“Nike’s first half results largely met our expectations,” commented Matthew Friend, group financial director, quoted in a press release.
“A comeback of this magnitude takes time, but we are seeing early successes – from momentum in core sports to accelerating our pace of new and innovative things,” he continued.
“Our teams are energized with the return of Elliott Hill to lead Nike’s next chapter of growth,” Friend said.
The group announced on September 19 the retirement of its CEO John Donahoe, who is to be replaced from October 14 by Mr. Hill, a former Nike manager.
Mr. Donahoe “will remain an advisor to the group to ensure a smooth transition until January 31, 2025,” the manufacturer said at the time.
Elliott Hill held several senior positions in Europe and North America within Nike before retiring in 2020, after a thirty-two-year career.
According to the September 19 press release, he participated in the transformation of the group into a company with more than $39 billion in annual revenue.
But the group has been losing momentum for several quarters and the first quarter of its 2025 fiscal year continued on the same trend: sales fell in all geographic areas and for the Nike and Converse brands (-15% to 501 million dollars).
One element on which he will have to concentrate, noted Mr. Friend during a conference with analysts, is the level of stocks. They reached $8.3 billion at the end of August (-5% over one year).
“We are going to have to do more promotions,” he said.
For Neil Saunders, director at GlobalData, “Nike has already diagnosed many problems”, but “it is not able to design quick solutions”.
He expects the group to “suffer a year of poor performance with only the promise of a better tomorrow.”
In electronic trading after the New York Stock Exchange closed, Nike shares fell 5.12%.