Nike (NKE) topped analysts’ estimates with its fiscal second-quarter results, its first since new CEO Elliott Hill took over in October.
The athletic apparel maker reported net income of $1.16 billion on revenue of $12.35 billion, above analysts’ estimates of $968 million in net income on revenue of $12.12 billion, per Visible Alpha. Last year, Nike posted a profit of $1.58 billion on $13.39 billion in revenue.
“We’re taking immediate action to reposition our business, so we can get back to driving long-term shareholder value,” said new CEO Elliott Hill, who took over the top job at Nike in October.
Hill laid out a number of new initiatives that are part of his plan to return Nike to growth, including a focus on key sports, cities, and countries, and reducing the amount of promotional events in Nike’s online shopping experience.
Nike shares jumped in after-hours trading Thursday shortly following the report’s release, before paring back most of those gains. The stock was down close to 30% for 2024 through Thursday’s close.
Nike Says It’s Making Progress Shifting to a Newer Product Portfolio
CFO Matthew Friend said the quarter “largely met our expectations,” and that the company is continuing to “make progress in shifting our portfolio.”
Friend said third-quarter revenue is expected to decline in the low-single digits compared to last year, while Nike’s profit margins could also be pressured by its new investments and shifting its product portfolio.
The forecast comes after the company had suspended its outlook in its first-quarter report, saying the decision would give Hill more time in the CEO role.
Nike’s sales and stock price have declined over the last year, with executives saying that they are looking to cut costs and pivot to focus on newer products, as the brand has seen increasing competition from domestic rivals and those in key markets like China.
Analysts have been bullish on the CEO change and said that while Hill still faces the same challenges that troubled predecessor John Donahoe, having a company veteran back in control could help Nike’s turnaround.
UPDATE—Dec. 19, 2024: This article has been updated to include additional information and reflect more recent share price values.