Nike stock slides as company withdraws guidance amid CEO change

Nike ( NKE ) stock sank nearly 5% in premarket trading Wednesday after the company reported fiscal first-quarter revenue that missed estimates and scaled back its outlook for the year amid a CEO transition.

The shoe giant reported first-quarter earnings of $0.70 per share, topping Wall Street estimates of $0.52 and down 26% from the year-ago period. Meanwhile, Nike's revenue of $11.59 billion fell short of analysts' estimates of $11.65 billion and fell 10% from the year-ago period.

Nike has seen sales decline in its direct-to-consumer business and its wholesale division. Nike Direct revenue was $4.7 billion, a 13% decrease from the same quarter a year ago. Wholesale revenue was $6.4 billion, down 8% from the same period a year ago.

“Returns of this scale take time, and while there have been some early wins, we have yet to turn the corner,” Nike CFO Matthew Friend said on the company's earnings call Tuesday night.

Morningstar Equity analyst David Swartz told Yahoo Finance that Nike's report was “what people expected.”

“Nike has really been warning us since late last year, December 2023, that the sports apparel market wasn't very strong and its innovation cycle wasn't looking particularly good even at the start of fiscal 2025,” Swartz said. “Right now, Nike is in a situation where it doesn't have a lot of new products coming in and it's turning to some other products.”

The quarterly report is Nike's first since the company announced a CEO change amid sluggish sales growth. Elliott Hill, a former Nike executive who retired in 2020, will succeed John Donahoe as CEO on October 14. The news initially sent Nike stock up 10%

Nike's stock has fallen more than 25% this year before the CEO change was announced on Sept. 19 and has been under pressure from rising sales and pressure from growing competitors in the space, such as On ( ONON ) and Deckers' ( DECK ) Hoka brands.

“The sportswear industry is much more competitive now than it was five years ago,” says Swartz. “Donahoe didn't realize it until it was a little too late.”

Friend said Nike expects revenue to fall between 8% and 10% for the current quarter, weaker than Wall Street's initial expectation of a 6.7% decline.

“Given traffic trends at Nike, digital retail sales trends across the marketplace and the final order book for spring, revenue expectations have been lower since the beginning of the year,” Friend said.

Tuesday's print marked the sixth straight quarter Nike reported single-digit revenue growth or worse. The company announced Tuesday that its upcoming investor day has been postponed and no future date has been announced.

In a note to clients Monday morning, Jefferies analyst Randall Konick wrote that he doesn't expect Hill to impact Nike's performance until fiscal 2026. Therefore, Konick believes the shares are “in no man's land and will probably be range-bound. For a few quarters.”