On Tuesday, Nike revealed a Q1 revenue decline and fell short of experts’ forecasts following its decision that it would postpone its investor day amid CEO transition.
Despite reports of a revenue dip, the sportswear giant’s stock rose by 0.83% to $89.13 apiece in the closed trade. However, it significantly eased by -5.92% to $83.85 per stock in the after-hours session.
Furthermore, Nike’s earnings per share stood at $0.70, which is better than analysts’ outlook of $0.52 but lower than the previous $1.01 data.
The Oregon-based company’s revenue plummeted to $11.60 billion compared to the $11.65 billion consensus and last quarter’s $12.60 billion report.
Meanwhile, Nike Brand Digital sales saw a significant slide of 20.00%, relatively offset by a 1.00% climb in revenues at its flagship stores.
Moreover, the firm’s effective tax rate surged to 19.60% compared to 12.00% last year, mainly due to a one-time item benefit in Q1 of 2023.
On the other hand, regarding shareholder returns, the sportswear company has maintained its record of boosting dividend payouts for more than two decades.
In the first quarter, the company distributed around $1.80 billion to shareholders via dividends and stock buybacks. As part of its four-year, $18.00 billion stock repurchase plan, Nike had repurchased 99.7 million shares for roughly $10.20 billion as of August end.
Elliott Hill Appoints as Nike CEO Amid Financial Struggles
According to reports, despite lackluster sales growth, Nike has appointed its veteran employee Elliott Hill as the new CEO.
Furthermore, in response to solid rivalry, the sportswear giant has boosted the launch of new items and aims to unveil a fresh line of affordable sneakers.
Despite Nike’s initiation, analysts maintained their outperform and hold ratings on the firm. Bernstein SocGenn Group and RBC Capital Markets have remained constant in their price targets.
These actions coincide with the company’s implementation of a $2.00 billion cost-saving plan, which includes a -2.00% reduction in workforce in response to sluggish sales performance and loss of market share to competitors.