Nike Struggles Continue, but Signs of Turnaround Appear

Nike’s attempted comeback under new president and CEO Elliott Hill is showing some initial signs of life, with the sports apparel and footwear giant beating expectations in its most recent quarter.

The Oregon-based Nike said it generated $11.3 billion in revenue for its fiscal third quarter, down 9% from the comparable period last year but above analyst projections. Net income of $794 million also trailed last year’s third quarter by 32%, but that total, too, surpassed the relatively tepid expectations of Wall Street—indicating there could be at least the roots of a recovery emerging.

“Look, it’s been a tough couple of years. We’ve been through a lot of change,” Hill said in an earnings call with analysts. “What’s encouraging is that in the 150 days since I’ve been back, we’ve reclaimed our identity. We know who we are.”

Investors had mixed feelings on the sentiment of progress, initially sending up shares in Nike by more than 2% in after-hours trading Thursday before a subsequent decline of more than 4%. The stock is down by 17% in the last six months, driven significantly by internal turbulence that has included leadership turnovers, multiple rounds of layoffs, and sliding company performance in the wake of heightened competition. 

Upcoming quarters will have more bumpiness with Nike detailing an outlook of further revenue and margin declines as the retooling continues. Hill, however, outlined a series of ongoing initiatives, including a slate of new products and retooled inventories. 

“Nike is getting back to being Nike again,” Jefferies analyst Randal Konik wrote in a research note. 

Hill also cited the brand’s work with the NFL and Eagles quarterback Jalen Hurts leading up to and during Super Bowl LIX—including a hugely popular “Love, Hurts” hoodie and massive exposure during the halftime show—as a key initiative during the quarter. 

The latest financial results follow an expectedly downbeat report last fall for the fiscal first quarter and a similarly sluggish one in December for the fiscal second quarter. 

Leadership Shifts

Nike’s comeback bid, meanwhile, includes the departure of additional senior executives. Chief strategy and transformation officer Daniel Heaf had his role eliminated, with his teams now being moved to the company’s finance department. Chief communications officer KeJuan Wilkins is also exiting after nearly two decades with Nike.

These shifts follow several similar ones in recent months across other major departments including sports marketing, legal, and human resources.