By
Bloomberg
Published
December 20, 2024
Nike Inc. second-quarter results surpassed analysts’ expectations, giving new Chief Executive Officer Elliott Hill a positive development to tout during his first earnings call.
Revenue, profit and gross margin all came in ahead of estimates in the quarter ended Nov. 30. The shares rose as much as 12% in extended New York trading. The stock has declined 29% this year through Thursday’s close.
The report suggests that performance is stabilizing at the world’s largest athletic-wear company. Nike is trying to reverse a sales slump tied to waning demand for its lifestyle shoe lines, such as the Air Force 1, and a lack of new products and designs. All regions except for China performed better than expected.
Hill, who came out of retirement to take the top job in October, is set to speak on a conference call with analysts later this afternoon. Investors are eager to hear how he plans to jumpstart growth. He has shuffled senior management and shifted some of Nike’s priorities in his early days, naming new leaders in the human resources, legal and sports marketing departments and shutting down a digital sneaker division.
In the statement, Hill said Nike is taking “immediate action to reposition our business,” without revealing specific changes.
In a research note, Bloomberg Intelligence analyst Poonam Goyal said that “better-than-expected wholesale and apparel revenue were the standouts, with each besting consensus by a wide margin.”
Management still has a lot of work to do: Revenue declined for a third straight quarter, as expected. Gross margin, while outpacing estimates, fell from a year earlier in part on higher discounts.
