Why Nike Stock Sank Today

Core Viewpoint - Nike's financial results for the fiscal first quarter of 2025 were disappointing, leading to a significant drop in stock price and the withdrawal of full-year guidance due to slower sales and declining profit margins [1][2][4]. Financial Performance - First-quarter net income was reported at $1.1 billion, which, while better than expected, represented a 28% decrease year over year [2]. - Revenue for the first quarter was $11.6 billion, down 10% and slightly more than anticipated, contributing to a 7% drop in stock price [3]. Guidance and Management Changes - Nike has officially pulled its full-year guidance, attributing this decision to the timing of the new CEO's hire, Elliott Hill, who will start in two weeks [2][4]. - The company initially expected a mid- to single-digit percentage drop in fiscal 2025 revenue but now acknowledges that revenue is trending lower than those expectations [4]. Market Position and Future Outlook - Nike is facing headwinds, with expectations for gross margins to continue declining rather than improving as previously anticipated [4]. - Investors are awaiting a strategic plan from the new CEO to stabilize the business and regain market share [4].