Jesse D. Garrabrant / NBAE by way of Getty Photographs
Nike (NKE) topped analysts’ estimates with its fiscal second-quarter outcomes, its first since new CEO Elliott Hill took over in October.
The athletic attire maker reported internet revenue of $1.16 billion on income of $12.35 billion, above analysts’ estimates of $968 million in internet revenue on income of $12.12 billion, per Seen Alpha. Final yr, Nike posted a revenue of $1.58 billion on $13.39 billion in income.
“We’re taking immediate action to reposition our business, so we can get back to driving long-term shareholder value,” mentioned new CEO Elliott Hill, who took excessive job at Nike in October.
Hill laid out quite a few new initiatives which might be a part of his plan to return Nike to development, together with a give attention to key sports activities, cities, and nations, and decreasing the quantity of promotional occasions in Nike’s on-line procuring expertise.
Nike shares jumped in after-hours buying and selling Thursday shortly following the report's launch, earlier than paring again most of these features. The inventory was down near 30% for 2024 by means of Thursday's shut.
Nike Says It's Making Progress Shifting to a Newer Product Portfolio
CFO Matthew Good friend mentioned the quarter "largely met our expectations," and that the corporate is constant to "make progress in shifting our portfolio."
Good friend mentioned third-quarter income is predicted to say no within the low-single digits in comparison with final yr, whereas Nike’s revenue margins may be pressured by its new investments and shifting its product portfolio.
The forecast comes after the corporate had suspended its outlook in its first-quarter report, saying the choice would give Hill extra time within the CEO function.
Nike’s gross sales and inventory worth have declined over the past yr, with executives saying that they want to lower prices and pivot to give attention to newer merchandise, because the model has seen growing competitors from home rivals and people in key markets like China.
Analysts have been bullish on the CEO change and mentioned that whereas Hill nonetheless faces the identical challenges that troubled predecessor John Donahoe, having an organization veteran again in management may assist Nike’s turnaround.
UPDATE—Dec. 19, 2024: This text has been up to date to incorporate further info and replicate more moderen share worth values.
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