Nike Shares Slip Below the Lows That Predated the Hiring of Elliott Hill

Core Insights - Nike's stock has declined approximately 20% since the announcement of Elliott Hill's return as CEO in September 2024, with uncertainty surrounding when the decline will cease [1] - Despite analysts resonating with Nike's message of a turnaround, a 10% drop in stock prices indicates investor skepticism about a near-term recovery [2] Financial Performance - Nike reported a 1% year-over-year revenue increase to $12.4 billion, but profit fell 32% to $792 million, facing challenges such as slow sales in China and $1.5 billion in annual tariff costs [4] - North America saw a 9% revenue increase year-over-year, with a 24% growth in sales to wholesalers, although there was a 10% decrease in consumer spending at Nike's website and stores [5] Strategic Direction - The company is focusing on improving "brand equity" and driving full-price sales while reducing promotions, amidst a climate of price sensitivity among consumers [3] - Analysts view the recent quarter's results as a successful execution of Nike's strategy, despite investor concerns, with potential profit margin growth hindered by tariffs [6] Market Reaction - Nike shares are currently below the prices prior to Elliott Hill's tenure as CEO, indicating that investors are seeking more evidence of a successful turnaround before expressing confidence [7]