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.
The sportswear company withdrew its full-year sales guidance on Tuesday, citing the leadership transition later this month. Nike is also postponing its investor day, which had been scheduled for November, giving Hill more time to develop his turnaround strategy.
Sales in the fiscal first quarter fell 10% to $11.59 billion, just short of the average analyst estimate. Declines were especially sharp in North America as well as Europe, Africa and the Middle East, while problems also persisted at the Converse brand.
Nike expects revenue to fall 8% to 10% in the second quarter before trends improve later this year.
The shares fell as much as 7.9% in New York trading Wednesday, the most intraday since Nike last reported results in late June. The stock dropped 18% this year through Tuesday’s close, compared with a 20% gain for the S&P 500 Index. Jefferies analysts warned share losses were likely to continue even after Hill joins.
Pressures are easing in some areas: Sales in Greater China outpaced analyst expectations, and the 4% drop there was the smallest among the company’s regions. Nike said new products are selling well in China, including the Pegasus 41 running shoe and classic franchises like Jordan.
Gross margin benefited from lower costs for products, warehousing and logistics. Earnings per share in the quarter, which ended Aug. 31, also surpassed expectations.