Nike posts biggest drop in sales since pandemic

Nike is pinning its turnaround plans on increasing sportswear sales to “everyday runners” after posting the biggest drop in quarterly sales since the pandemic.
The retailer withdrew its annual revenue forecast and postponed its investor day on Tuesday as it waits for the Nike veteran Elliott Hill to return as chief executive and lead a strategy reset.
Matthew Friend, chief financial officer of Nike, said the delays would provide Hill with “the flexibility to reconnect with our employees and teams” and to “evaluate the current strategies and business trends” to prepare the business for the 2026 financial year.
However, Friend said that a new strategy must include a focus on regaining market share in running shoes and clothes.
“Nike’s a running company, Nike’s a running brand and it’s incredibly important for Nike to win with runners,” he said. “And so our commitment to reinvesting in those channels with those partners on the ground every day is how we’re going to change the trajectory of this business.”
He added: “We’ve acknowledged that we’ve lost market share in the running specialty channel. More than four years ago, we pulled back on our engagement with that channel, and as a result of that, we saw market share losses….While we’ve seen tremendous success at the top of the pyramid, with innovation, with marathons and on the track, we haven’t made as much progress with everyday runners and that’s where our team’s focus and attention has been over the last year.”
Nike is hoping that new cushioning innovation — premium models that blend foams and Zoom air for a “new running sensation” — as well as a refreshed line-up of clothing will help it regain market share among amateur runners.
Nike’s sales growth has been under pressure this year from nimbler, on-trend rivals such as On and Deckers’ Hoka. The company has also faced a slowdown of sales in China.
Last month the company said it was bringing Hill, 60, back to the company to succeed John Donahoe, 64, who has served as president and chief executive since January 2020. Hill is a former president of consumer marketplace at Nike.
Hill was also Nike’s general manager for North America during a difficult stretch in 2010, Friend said, when the company returned to growth through “reprofiling the marketplace around sport”. It needed a similar approach now, he added, while establishing “deeper connections with consumers through sport”.
Nike’s overall net revenue in the first quarter declined 10.4 per cent to $11.59 billion, slightly worse than the 10 per cent fall estimated by analysts. It represented the steepest drop in more than four years.
Footwear sales in the US and Europe at the world’s largest sportswear company dropped 14 per cent each in the first quarter to $3.2 billion and $1.95 billion, while China fell 3 per cent to $1.24 billion.
The update sent Nike shares down $4.28, or 4.8 per cent, to $84.85 in after-hours trading on Tuesday in New York.
Dave Wagner, head of equities at Aptus Capital Advisors, said: “I am pretty disappointed by the revenue number here. This is not a great report … from a quantitative standpoint, but also from a qualitative standpoint of cancelling the investor day.”