Nike Inc (NYSE:NKE, ETR:NKE) shares are set to step lower on Wednesday after the athletic apparel brand posted year-over-year declines in both revenues and profits for the fiscal first quarter.
Revenue for the three months ended August 31, was $11.6 billion, down 10% year-over-year and falling short of the Wall Street consensus of $11.65 billion.
Nike Direct revenue was down 13% year-on-year at $4.7 billion and Wholesale revenue dropped 8% to $6.4 billion.
Converse revenue was $501 million, a 15% decline from the same period last year.
Earnings per share (EPS) decreased 26% year-over-year to $0.70 from $0.94. This, however, was ahead of estimates of $0.51.
"Nike's first quarter results largely met our expectations. A comeback at this scale takes time, but we see early wins — from momentum in key sports to accelerating our pace of newness and innovation," Nike CFO Matthew Friend commented.
Friend added that staff "are energized" with the return of Elliott Hill returns as CEO, a leadership change announced last month as Nike faces challenges, including losing market share to European rival Adidas AG and newer, younger footwear brands such as ON and Hoka. Additionally, sales in key markets like China have slowed.
During its conference call, the company mentioned it would reassess its “approach to guidance” amid the CEO transition. Analysts are currently forecasting EPS of $0.82 on revenue of $12.47 billion for the second quarter.
Nike also announced the postponement of its previously scheduled investor day.
The company’s shares are trading 5.9% lower at $83.85 in pre-market trading on Wednesday.