Nike Stock Dives on Weaker Sales and Disappointing Forecast
Nike's stock took a hit in after-hours trading on Thursday, dropping nearly 4% due to disappointing sales and a less-than-expected full-year forecast. Despite beating Wall Street's earnings estimate by $0.04 with GAAP earnings of $0.48 per share for the fiscal first quarter, revenue fell 4.2% year-over-year to $11.21 billion, missing expectations by $110 million.
The company's CEO Elliott Hill has been working to turn Nike around after years of focusing on direct-to-consumer sales and established sneaker franchises. He has implemented a new strategy that includes rebuilding relationships with wholesale retailers, clearing older inventory, and restoring full-price selling. This effort is also focused on sports categories such as running, basketball, football, and training.
However, Nike still faces challenges in China, where revenue fell 13% in the first quarter, while Converse sales dropped 28%. The company has been adjusting its approach to better meet local consumers' needs. Additionally, Nike is undergoing an operating overhaul called Pace, which aims to simplify its organization and direct more resources toward sports categories.