Nike has released its fiscal second-quarter earnings report, showing revenue of $12.35 billion, which beat market expectations but still lagged behind last year’s $13.39 billion. Adjusted earnings per share came in at $0.78, below estimates and last year’s $1.03.
The company’s new CEO, Elliott Hill, who took over 60 days ago, has outlined a plan to shift Nike’s focus back to its core values of sport. During the earnings call, Hill stated that he believes Nike “lost” its obsession with sport and vowed to lead with sport and put athletes at the center of every decision.
Hill’s team plans to reinvest in brand storytelling and build an integrated marketplace across NIKE Direct and wholesale channels. However, analysts are cautious about the company’s turnaround plan, citing concerns over lower sales and profitability over the next 12 months.
Nike shares have dropped around 4% in premarket trading following the earnings report, as investors anticipate short-term margin pressure. The company’s stock has lost more than 36% over the past year due to a loss of focus on products and relationships with distribution partners.
Key highlights from Nike’s Q2 earnings include:
– Adjusted earnings per share: $0.78 vs. $0.63
– Revenue: $12.35 billion vs. $12.13 billion
– Gross margin: 43.6% (down 100 basis points)
– Product input costs and warehousing/logistics costs decreased.
Source: https://finance.yahoo.com/news/nike-ceo-elliott-hill-our-turnaround-will-be-challenging-and-will-hinge-on-sports-233222771.html