An employee carries shoe boxes at the Footlocker retail store at Barton Creek Square Mall on August 28, 2024 in Austin, Texas.
Brandon Bell | Getty Images
Nike will report its quarterly results on Tuesday as investors brace for another string of less-than-stellar results. The company announced in September that CEO John Donahoe would step down.
Here's what analysts expect from the world's largest sneaker company for the first fiscal quarter of 2025, according to LSEG consensus estimates:
- Earnings per share: 52 cents
- Revenue: $11.65 billion
Analysts expect a 10% drop in sales compared to the same period last year and a nearly 45% drop in profits.
The bleak outlook comes against the backdrop of a reboot at Nike. Last year, the company was accused of falling behind in innovation and ceding market share to competitors as it focused on selling directly to consumers through its own websites and stores rather than through wholesalers such as. B. concentrated Foot Locker And DSW.
In September, Nike announced that Donahoe would be stepping down and being replaced by company veteran Elliott Hill, who is expected to take the helm on October 14.
Under Donahoe's leadership, the company grew annual sales by more than 31%, but achieved that goal by introducing legacy franchises like Air Force 1s, Dunks and Air Jordan 1s — not the groundbreaking styles that made the company a global powerhouse made.
In recent quarters, Donahoe has talked about the need to improve innovation and improve Nike's 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 the next chapter.
Donahoe is expected to be present at the company's conference call with investors on Tuesday afternoon, but observers will be interested to see if there are any hints about where the company plans to go under Hill's leadership.
The new CEO must strengthen Nike's innovation pipeline, revamp relationships with wholesalers and improve morale after a series of layoffs and a breakdown in company culture.
Overall, the sneaker market in the USA was relatively stagnant. Consumer spending on consumer goods like new clothing and shoes has been sluggish, which has made Nike's situation even more difficult.
U.S. shoe sales are expected to grow just 2% in 2024 compared to 2023, after little change between 2022 and 2023, according to Euromonitor. The company said the athletic footwear market is expected to grow about 5.6%.
Nike's performance was also weighed down by the uneven economy in China, Nike's third-largest market by revenue, which will be another key point to watch for in the 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 “weaker outlook” in the region. However, China's central bank recently unveiled its biggest stimulus measures since the Covid pandemic, which is expected to provide a much-needed boost to the region's economy.
Nike's fiscal first quarter would have ended before these stimulus measures, but executives could comment on how sales are trending in the current period.
Shares of Nike closed at $88.40 on Monday, down about 19% so far in 2024 and well below the S&P 500's gains of about 21%.
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