Nike sales drop but stock jumps as new CEO talks turnaround

New Nike CEO Elliott Hill on Thursday said the company needs to turns its attention back to running trails, soccer fields and basketball courts.

In his first earnings report as the company’s top executive, Hill said Nike’s “clear priority is to return sport to the center of everything we do.”

The company reported $12.4 billion in quarterly revenue, down 8%, but better than the 9% drop expected by Wall Street analysts. Nike’s stock was up 8% in after-hours trading within 30 minutes of the earnings report.

Hill, a popular insider, started work on Oct. 14.

Thursday’s earnings report marked his first public comments about the business.

“We’re taking immediate action to reposition our business, so we can get back to driving long-term shareholder value,” he said in a press release. “Our team is ready to go, and I’m confident you will see more moments of Nike being Nike again.”

Under previous CEO John Donahoe, Nike bet heavily on direct sales and retro sneakers, moves that paid off early in the pandemic but which subsequently soured as smaller, nimbler rivals filled the shelf space Nike vacated, including at running stores.

A year ago, Nike announced a $2 billion cost-cutting effort. In February, it announced it would cut 2% of its global workforce, which eventually included more than 700 employees in Oregon, including a significant number of executives and managers.

Before his last day as CEO, Donahoe announced a turnaround plan that included focusing more on sports, getting products to market quicker, better marketing and rebuilding Nike’s wholesale business.

While Thursday marked Hill’s first public remarks as CEO, Nike’s recent moves suggested he would continue to refocus on sports. Since he started work, the company has extended its deals with the WNBA and NBA by 12 years and with the NFL another 10 years. It’s also shut down a part of the company that made virtual sneakers for the metaverse.

This story will be updated.

– Matthew Kish covers business, including the sportswear and banking industries. Reach him at 503-221-4386, [email protected] or @matthewkish.