NIKE-With New CEO, Can Nike Just Do It Again? Not This Year

Core Insights - Nike's flawed direct-to-consumer (D2C) strategy has led to revenue weakness across all channels, with a reported fiscal 2025 Q1 revenue of $11.6 billion, down 10% year over year [1] - The company is attempting to balance its product portfolio and reenergize brand momentum, but a significant turnaround will take time [1] - New CEO Elliott Hill is expected to refocus the brand on its athletic roots while maintaining a balance with the D2C strategy [2] Financial Performance - Nike Direct revenues fell 13% to$ 4.7 billion, with a 20% drop in Nike Brand Digital sales, although Nike-owned stores saw a 1% increase [1] - Gross margin improved by 120 basis points to 45.4% due to lower product and logistics costs [1] - The company postponed guidance for the remainder of the fiscal year, anticipating similar revenue drops in the upcoming quarter due to promotional pricing on iconic brands [3] Strategic Initiatives - Nike plans to collaborate with wholesale partners like Foot Locker and Dick's Sporting Goods to drive growth [2] - The company aims to increase the mix of full-price products in its direct channels while leveraging supply chain capabilities [3] - There is a focus on driving growth across the entire marketplace, particularly in running and soccer, which have better international distribution [3] Market Positioning - The company is working to reignite growth and momentum with wholesale partners by demonstrating the full dimension of the Nike portfolio across various demographics [4] - Nike is focused on accelerating newness and innovation to create more consumer engagement and energy [4]