Nike (NKE) reported fiscal first quarter earnings that were mixed as Wall Street awaits more details on its CEO transition and turnaround strategy.
The shoe giant reported first quarter earnings per share of $0.70, surpassing Wall Street's expectations for $0.52. Meanwhile Nike's revenue of $11.59 billion fell short of analyst estimates for $11.65 billion. Both metrics saw year-over-year declines from the same quarter a year ago.
Shares traded on both sides of the flat line in after hours trading following the release.
The report is Nike's first since the company announced a CEO change amid lackluster sales growth. Elliott Hill, a former Nike executive who retired in 2020, will replace John Donahoe as CEO on Oct. 14. The news initially sent Nike stock up as much as 10%.
"Long-time NKE veteran Elliott Hill returning as CEO and its implications on NKE’s turnaround strategy is likely to dominate the narrative of the 1Q print," Citi analyst Paul Lejuez wrote in a note to clients previewing the earnings.
Nike stock has slumped this year, falling more than 25% prior to the CEO changeup announcement on Sept. 19 amid concerns over slowing sales growth and pressure from rising competitors in the space like On (ONON) and Deckers' (DECK) Hoka brand.
Tuesday's print marked the sixth straight quarter Nike has reported single-digit revenue growth, or worse.
In a note to clients on Monday morning, Jefferies analyst Randal Konik wrote he doesn't expect Hill to have an impact on Nike's performance until the fiscal year 2026. Therefore, Konik believes shares are in "no man's land and likely remain range-bound for a number of quarters."
UBS analyst Jay Sole noted after the CEO change that investors may soon sour again on Nike stock as focus shifts to the not "great" fundamental story following its first quarter earnings release. Sole believes that Hill's approach to Nike's product slump will be paramount to the market's acceptance of the CEO change.
"The market has been very focused on how Nike will improve the amount and quality of new product innovation it brings to market," Sole wrote on Sept. 19. "The market may wonder if Mr. Hill has the right skill set to help Nike fix its product issues."
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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