The struggles of athletic footwear and apparel giant Nike were on full display on Wednesday when the company released its quarterly earnings, which showed a revenue miss, and announced an annual forecast withdrawal.
Nike reported $0.70 in earnings per share (EPS), topping the estimates of $0.52 EPS. However, the company’s revenue for the fiscal first quarter of 2025 came at $11.59 billion, a 10% drop compared to the same period last year and below the $11.65 billion expected by analysts.
There were some positives for Nike as its cost-cutting tactics, like layoffs and moving on from underperforming products, increased the company’s gross margin to 45.4%, marking a 1.2 percentage points jump and besting 44.4% expected by analysts.
For the current quarter, Nike expects its revenue to drop between 8% and 10%, indicating an even worse performance compared to the 6.9% decline expected by analysts. Additionally, the company forecasts a 1.5 percentage point drop in gross margin.
Nike is currently in the midst of a CEO change, with John Donahoe expected to leave the role at the end of October and be replaced by company veteran Elliott Hill. The executive shakeup prompted the company to withdraw its annual forecast while also canceling Investor Day, which was previously scheduled for November.
“This provides Elliot with the flexibility to reconnect with our employees and teams, evaluate the current strategies and business trends, and develop our plans to best position the business for fiscal ’26 and beyond,” Matthew Friend, executive vice president and CFO at Nike, explained during an earnings call with analysts.
Following the release of the earnings report, Nike’s stock dropped by 5.31% in after-hours trading compared to Wednesday’s closing price of $89.13 per share. Before the slide, the stock was already 16.35% down year-to-date.