Nike has announced its decision to withdraw its full-year forecast following a significant decline in first-quarter revenue, setting the stage for incoming CEO Elliott Hill.
- First-quarter revenues fell by 10%, prompting restructuring plans ahead of new leadership.
- Nike’s direct-to-consumer sales dropped 13%, with notable declines in Europe and North America.
- Despite cost-saving efforts, digital sales suffered a steep 20% decline globally.
- Elliott Hill is set to take over as CEO, following a history of leadership challenges.
First-quarter revenues for Nike have experienced a significant 10% decrease, prompting the company to withdraw its full-year forecast. This move is seen as a strategic decision to address financial uncertainties as Nike prepares for a leadership transition, with Elliott Hill assuming the role of CEO.
In the wake of declining revenues, Nike has initiated restructuring efforts. The company’s direct-to-consumer sales, in particular, saw a 13% drop, amounting to $4.7 billion (£3.8 billion). This decline is largely attributed to slowing consumer demand and heightened competition in key markets.
A detailed examination of regional performance reveals that Nike’s operations in Europe were heavily impacted, with revenues falling by 13% to $3.1 billion (£2.5 billion). This region faced strong competition from emerging brands in the running market, affecting both footwear and apparel sales. Meanwhile, North America, Nike’s largest market, recorded an 11% decline in sales, driven by a notable 14% decrease in footwear sales.
Despite the implementation of cost-saving initiatives introduced in December 2023, aimed at reducing expenses by $2 billion (£1.5 billion), Nike’s digital sales faced a sharp 20% decline globally. This has raised concerns about the effectiveness of the company’s strategies in adapting to the evolving retail landscape.
Amid these challenges, Nike CFO Matthew Friend acknowledged that the first-quarter results largely met the company’s expectations, emphasising the importance of maintaining momentum in key sports and innovation initiatives. Friend expressed optimism in the incoming CEO Elliott Hill, highlighting Nike’s commitment to navigating these turbulent times with resilience.
As Nike navigates its financial challenges, the leadership of Elliott Hill is anticipated to guide the company through this transitional period.
