Nike shares are faltering as sales fall short of Wall Street estimates

Nike ( NKE ) reported mixed first-quarter results as Wall Street awaits more details on its CEO transition and turnaround strategy.

The footwear giant reported first-quarter earnings per share of $0.70, higher than Wall Street’s estimate of $0.52 and down 13% from the same period a year earlier. Meanwhile, Nike’s revenue of $11.59 billion fell short of analyst estimates of $11.65 billion, marking a 10% decline from the year-earlier period.

Nike continued to see sales declines in both its direct-to-consumer operations and its wholesale division. Nike Direct’s revenue was $4.7 billion, down 13% from the same quarter a year ago. Meanwhile, wholesale revenues were $6.4 billion, down 8% from the same period a year ago.

Shares traded on either side of the flat line in after-hours trading after the release.

Morningstar stock analyst David Swartz told Yahoo Finance that Nike’s report was “pretty much what people expected.”

“Nike has been warning us since late last year, December 2023, that the sportswear market was not very strong and that the innovation cycle was not looking particularly good for the start of fiscal year 2025,” Swartz said. “Right now, Nike is in a situation where it’s not releasing many new products, and the company is pulling back on some other products.”

The quarterly report is Nike’s first since the company announced a CEO change amid lackluster sales growth. Elliott Hill, a former Nike executive who retired in 2020, will replace John Donahoe as CEO on October 14. The news initially caused Nike shares to rise as much as 10%.

Shares of Nike have tumbled this year, falling more than 25% ahead of the CEO change announcement on September 19, amid concerns about slowing sales growth and pressure from emerging competitors in the market such as the On brand (ONON) and Deckers (DECK) Hoka.

“This sportswear industry is much more competitive now than it was five years ago,” Swartz said. “Donahoe didn’t understand that until it was a little too late.”

Tuesday’s print marked the sixth consecutive quarter. Nike reported single-digit sales growth, or worse. The company also announced on Tuesday that its upcoming investor day has been postponed without a future date announced.

Jefferies analyst Randal Konik wrote in a note to clients Monday morning that he doesn’t expect Hill to have an impact on Nike’s performance until fiscal 2026. Therefore, Konik believes the shares are in ‘no man’s land’ and are likely to remain within the range. for several quarters.”

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Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.

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