Nike sales and profits slumped in its fiscal first quarter as the sportswear giant wrestles with shoppers' sluggish demand for new sneaker models and other products.

By ANNE D'INNOCENZIO

The Associated Press

October 1, 2024 at 10:11PM

NEW YORK — Nike sales and profits slumped in its fiscal first quarter as the sportswear giant wrestles with shoppers' sluggish demand for new sneaker models and other products.

The lackluster results Tuesday came after Nike announced last month that its CEO, John Donahoe, is stepping down on Oct. 13. Company veteran Elliott Hill is coming out of retirement to head up the company.

"A comeback at this scale takes time, but we see early wins — from momentum in key sports to accelerating our pace of newness and innovation,'' said Matthew Friend, executive vice president and Nike's chief financial officer, in statement. ''Our teams are energized as Elliott Hill returns to lead Nike's next stage of growth.''

Friend told analysts Tuesday that, given its CEO transition and with three quarters left in the fiscal year, Nike has withdrawn its full-year financial-performance guidance and intends to provide a quarterly outlook for the balance of the fiscal year. It also postponed its investor meeting that had been scheduled for Nov. 19.

Nike has been known for its innovation but in recent years, analysts have said that it has lost its focus on coming up with cool products.

Neil Saunders, managing director at GlobalData Retail, said that some of the sales decline was due to a weaker consumer economy that has shoppers buying fewer sneakers and not splurging on clothing as they once did.

"Nike has done itself no favors with a lack of focus and oomph in a market where far more effort and exertion is needed to hold onto sales,'' he said. ''There is a general sense that Nike has lost its edge and that the power of its innovation and the quality of its storytelling have both been faded.''

Saunders noted that at the same time, smaller rival brands have moved into Nike's territory and successfully connected with consumers in a way that Nike has failed to do.

Nike posted net income of $1.05 billion, or 70 cents per share, in the quarter that ended Aug. 31. That compares with $1.45 billion, or 94 cents per share, in the year-ago period.

Sales fell 10% to $11.59 billion.

Analysts were expecting earnings of 52 cents a share on sales of $11.64 billion, according to FactSet.

Shares of Nike Inc., which is based in Beaverton, Oregon, were down 5% in after-hours trading following the earnings report. They are down 18% so far this year.