(Reuters) – Nike shares fell 6% after the close on Tuesday as the company withdrew its annual revenue forecast and postponed its investor day, weeks before a new CEO takes the helm to guide the sports giant. sportswear through an ongoing strategy reset.
“We are withdrawing our full-year guidance…This provides Elliott the flexibility to…evaluate current strategies and business trends and develop our plans to best position the business for fiscal 2026 and beyond.” Nike (NYSE:) said Chief Financial Officer Matthew Friend.
Nike had previously forecast a mid-single-digit percentage drop in its annual revenue.
Hill, who was with Nike for 32 years before retiring in 2020, will take over on Oct. 14 and is expected to help the company start from scratch and rebuild wholesale partnerships that had been reduced during the outgoing CEO's tenure. , John Donahoe.
Donahoe's focus on driving sales through the company's stores and website had led American retailers such as standing locker (NYSE:) and Dicks Sporting Goods to quickly fill the space that Nike had vacated with fashionable competitors such as On, Hoka and New Balance, backed by Roger Federer.
The company is yet to see the sales benefits of its push to accelerate innovation by launching new product lines such as the Air Max Dn and Pegasus 41 to revive demand.
Its footwear sales in the US and Europe fell 14% each in the first quarter, while Greater China fell 3%. Overall net revenue decreased 10.4% to $11.59 billion. Analysts had expected a 10% drop to $11.65 billion, according to estimates compiled by LSEG.
“I'm pretty disappointed by the revenue number here… this is not a great report at all from a quantitative standpoint, but also from a qualitative standpoint of canceling investor day,” said Dave Wagner, head of shares in Aptus Capital Advisors, which has a stake in Nike.
Nike's investor day was previously scheduled for Nov. 19.
However, the company reported a 120 basis point increase in gross margins to 45.4%, thanks to attempts to reduce costs through layoffs and reducing supply of some underperforming products.
First-quarter earnings per share of 70 cents also beat estimates of 52 cents, according to analyst data compiled by LSEG.
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