Nike has withdrawn its annual revenue forecast and reported disappointing quarterly results, with shares dropping 6% after hours on October 2, 2024. The sportswear giant's revenue fell 10.4% to $11.59 billion, missing analysts' expectations amidst weak footwear demand and intense competition from newer brands.
The company had previously anticipated a mid-single-digit percentage decline in annual revenue but has struggled to regain market share, particularly in the United States and Europe, where sales fell 14% each. Additionally, a 3% drop in the Greater China region has compounded its challenges.
Despite the downturn, Nike reported a slight improvement in gross margins, increasing by 120 basis points to 45.4% due to cost-cutting measures. The company's profit per share of 70 cents surpassed analysts' estimates of 52 cents.
In a significant leadership change, Elliott Hill, a long-time Nike veteran, will take over as CEO on October 14, aiming to revitalize sales growth and restore partnerships with US retailers that have been lost under the previous CEO, John Donahoe. Nike also announced the postponement of its investor day, originally scheduled for November 19, further disappointing investors.