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Nike on Tuesday said it was postponining its investor day as it delivered mixed fiscal first quarter results and gears up for a new CEO to take the helm.

Last month, the company announced that CEO John Donahoe would be stepping down in October and replaced with longtime company veteran Elliott Smith. Given the impending CEO change, the company said in a news release that it will “address its approach to guidance” on its conference call, scheduled for 5 p.m. ET.

In June when reporting fiscal fourth quarter results, Nike cut its guidance for fiscal 2025 and said it was expecting sales to be down mid-single digits after it previously expected them to grow.

Nike also said that its investor day, originally scheduled for November, would be postponed. It’s unclear when the meeting will be rescheduled. 

Here’s how the world’s largest sneaker retailer performed compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

  • Earnings per share: 70 cents vs 52 cents
  • Revenue: $11.59 billion vs $11.65 billion

The company’s reported net income for the three-month period that ended August 31 was $1.05 billion, or 70 cents per share, compared with $1.45 billion, or 94 cents per share, a year earlier.

Sales dropped to $11.59 billion, down about 10% from $12.94 billion a year earlier.

Innovation

Over the last year, Nike has been accused of falling behind on innovation and ceding share to competitors as it focused on selling directly to consumers through its own websites and stores rather than through wholesalers such as Foot Locker and DSW

The company announced in September that Donahoe would be stepping down and would be replaced by company veteran Hill, who is scheduled to take the helm Oct. 14.

Under Donahoe’s leadership, the company grew annual sales by more than 31%, but it got there by churning out legacy franchises such as Air Force 1s, Dunks and Air Jordan 1s — not the groundbreaking styles that turned the company into a global powerhouse. 

Over the last few quarters, Donahoe has spoken about the need to improve innovation and mend Nike’s relationships with wholesalers, but the company’s board decided that Hill, who spent 32 years with Nike before retiring in 2020, would be the right person to lead its next chapter. 

Donahoe is expected to be present during the company’s conference call with investors Tuesday afternoon, but observers will be keen to see if there are any clues into where the company is planning to go under Hill’s leadership. 

The incoming CEO will need to power up Nike’s innovation pipeline, reset its relationships with wholesalers and improve morale after a series of layoffs and a breakdown in culture. 

Overall, the sneaker market has been relatively stagnant in the U.S. Consumer spending on discretionary goods such as new clothes and shoes has been sluggish, which has made Nike’s situation that much more difficult. 

Footwear sales in the U.S. are projected to grow by just 2% in 2024 compared with 2023 after barely budging between 2022 and 2023, according to Euromonitor. Athletic footwear is expected to grow by about 5.6%, the firm said. 

China

Nike’s performance has also been weighed down by the uneven economy in China, Nike’s third-largest market by revenue. Nike’s performance in China is often an indicator of the region’s financial health, and in late June, it warned of a “softer outlook” in the region.

During its fiscal first quarter, Nike posted $1.67 billion in revenue in the region, slightly above the $1.62 billion that analysts had expected, according to StreetAccount.

China’s central bank recently unveiled its largest stimulus measures since the Covid pandemic, which is expected to give the region’s economy a much-needed boost. 

Nike’s fiscal first quarter concluded prior to those stimulus measures, but executives may share color on how sales are performing during the current period. 

Shares of Nike closed at $89.13 on Tuesday, down about 18% so far in 2024, significantly underperforming the S&P 500’s gains of about 20%.

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