Nike shares plunged on Thursday after the sports giant signaled a muted near-term revenue outlook, even as the company promised to surprise consumers with new products in Olympic year.
The sports giant, which has recently been criticized by some Wall Street analysts for a lack of hot new products, reported flat sales and profits on a quarterly basis, although they were slightly lower than a year ago. , which exceeded analysts' expectations.
Stocks initially rallied after the German soccer team's results came just hours after its CEO highlighted the win during a conference call, choosing Nike over Adidas.
However, Nike's stock price fell sharply after Chief Financial Officer Matthew Friend predicted that sales growth would be only 1% for the next quarter, the fiscal fourth quarter. .
Friend also said he expected sales to decline by “low single digits” in the first half of next financial year, partly reflecting “the weaker macro outlook around the world.”
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Profit for the quarter ended February 29 was $1.2 billion, down 5% from the same period a year ago. Revenues were $12.4 billion, almost unchanged from the same period last year.
Mr. Friend said temporary severance payments of about $400 million associated with layoffs depressed results, and the impact of a “transition” in which some old products are phased out and new ones introduced, resulting in short-term He warned that his business performance would be adversely affected.
Following criticism from some analysts, CEO John Donahoe emphasized that the company's recent executive changes are part of an effort to “further strengthen our focus on sports.”
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Donahoe has promised to make “significant advances” next month in sports, including football, basketball and track and field, with a focus on its Air footwear brand.
On a conference call with analysts, Donahoe emphasized that the German soccer player chose Nike over Adidas, which has a decades-long partnership with the German brand, saying, “We'll make the adjustments we need to make to win.” However, we are acting with a sense of urgency.”
Donahoe said the company was “deeply honored” to win in Germany, saying it was “a testament to our ability to tell our story to make the German team a global brand and our players global heroes.” I felt very privileged and privileged.”
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Nike stock fell 6.5% in after-hours trading.
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