Nike (NKE, Financial) is scheduled to reveal its second-quarter results on Thursday with all eyes on its efforts at turnaround under newly appointed CEO Elliott Hill, who joined in September. Weak sales in China, falling discretionary expenditure, and competition from the likes of Adidas and Hoka are challenges the sportswear behemoth faces.
Wall Street anticipates Nike to post a 9.6% year-over-year drop in earnings of $0.63 per share on revenue of $12.11 billion. The company expects a 150-basis-point fall in gross margins and earlier projected a sales drop of 8% to 10% for the quarter.
Nike updated their fiscal 2025 projection in October, when it withdrew its guidance, citing uncertainty due to its CEO change. Though Barclays analyst Adrienne Yih noted that major results from the recovery plan would probably take months to come to fruition, analysts are closely monitoring any early impact of Hill's leadership.
Since its Q1 results, Nike's shares have lost about 12%; this has helped to explain a 28% decrease year-to-date compared to a 27% increase in the S&P 500 Index. Although management has underlined product innovation and possible late 2025 improvements, the market is still wary of the speed of recovery.
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