Nike is experiencing one of the most complicated times in its history. The American sportswear giant is mired in something of a perfect storm of declining revenue and profits, while trying to navigate its way out with a new CEO. A few weeks ago, he announced he was bringing back a retired house manager, Elliott Hill, to try to turn the company around 180 degrees.
Hill will join in a few days the multinational, which has just announced the results of the first quarter of the 2025 financial year – it has a different fiscal calendar – which ended on August 31. Three months that include sporting competitions such as the Paris Olympic Games, the European Cup or the Copa América football which, in theory, stimulate sales of this type of business.
It wasn’t like that. Nike closed this first quarter with a 10% drop in revenue; and profit, 28%. Concretely, it achieved a turnover of 11.589 million dollars and earned 1.051 million. These figures are equivalent to 10,460 and 950 million euros respectively.
With this data, Nike decided to take a step back. On the one hand, he will not hold a meeting with investors during the month of November, to give the new CEO time to design a new strategy. However, it is withdrawing its forecast for the full year, in which it anticipated a drop in revenue – in the 12 months ending June 30 – of 5%.
Growing up “will take time”
Now the company is only giving expected figures for the current quarter, which runs from September 1 to November 30, in which it expects revenue to fall between 8% and 10%.
“We believe that the return to relevant growth will take time,” admitted Nike CFO Matthew Friend during a conference with analysts. “But we believe we now have the necessary elements” to turn the company around “especially with Elliott” at the helm of the company.
The elimination of forecasts, according to the company, is good news because it allows the new CEO to have “the flexibility to reconnect with employees and teams, evaluate business strategies and trends, and develop initiatives to better position the company,” Friend explained.
What will happen to the workforce is also excluded from these forecasts, as previous CEO John Donahoe announced a nearly $2 billion cost-cutting plan before the summer, which included a reduction in 2% of its workforce. That’s almost 1,500 layoffs.
