:max_bytes(150000):strip_icc()/GettyImages-2167904824-4b35fa848cac49d38de4c5bed5a5cd9f.jpg "What You Need to Know Ahead of Nike’s Earnings Tuesday")
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Key Takeaways
- Nike reports earnings Tuesday after the market closes, with analysts expecting a decline in sales and profits from the same time last year.
- The report will be John Donahoe’s last as CEO. Nike announced plans earlier this month to bring in 30-year-plus Nike veteran Elliott Hill as CEO next month.
- Analysts have said that Nike could cut its full-year projections and move its investor day, currently set for Nov. 19.
Nike (NKE) reports earnings after the bell Tuesday for the first quarter of fiscal 2025, weeks after announcing a CEO change, with Elliott Hill set to replace John Donahoe next month.
Analysts expect sales and profits to decline year-over-year, with total revenue projected to fall about 10% to $11.65 billion from to $12.94 billion in the first quarter of last year. Deutsche Bank analysts said the quarter should be the bottom for Nike’s sales decline before a recovery.
Net income is projected to fall by nearly half year-over-year to $770.9 million, down from $1.45 billion a year ago as the company is expected to report higher expenses due to increased advertising during the Olympics, which took place during the quarter, and a focus on developing new products.
| Analyst Estimates for Q1 2025 | Q4 2024 | Q1 2024 | |
| Revenue | $11.65 billion | $12.61 billion | $12.94 billion |
| Diluted EPS | 51 cents | 99 cents | 94 cents |
| Net Income | $770.9 million | $1.5 billion | $1.45 billion |
Key Metric: Full-Year Outlook
In its most recent report, Nike gave a downbeat outlook for sales in the first quarter and fiscal 2025, citing concerns about the Chinese market, online sales, and the impact that a shift to focus on newer products could have on near-term sales. The news sent its stock sharply lower.
Ahead of Tuesday’s report, Baird analysts said they believe Nike can beat first-quarter estimates, but said the athletic apparel maker could lower its sales projections in the second half of the year to provide a “cushion” during its transition to a new CEO and focus on efforts to improve profitability.
Deutsche Bank analysts said that while an outlook cut is possible, they believe Nike will affirm its full-year projections as part of a “narrative of gradual improvement.”
Business Spotlight: CEO Swap, Investor Day Plans
Tuesday’s report will be Donahoe’s final as CEO, with Hill set to take over the top role in mid-October. Analysts have largely cheered the change, saying having a longtime company veteran as CEO, along with other Nike veterans in other executive positions, should improve morale and help the company’s vision moving forward.
Some analysts expect that Nike’s investor day, scheduled for Nov. 19, could be pushed back to give Hill more time as CEO before presenting a renewed long-term vision for Nike to investors.
Nike shares were recently up less than 1%, extending a recent rally since the CEO change was announced.