Nike’s Trajectory Improves on Better-Than-Expected Sales

Nike's wholesale business and strength in North America powered the company’s latest quarterly sales above Wall Street’s expectations, showing that turnaround efforts at the world’s largest sportswear company are starting to deliver results. Sales fell 1% on a currency-neutral basis in the company’s most-recent quarter, a smaller drop than investors anticipated, according to a statement. Revenue in the period was $11.7 billion, higher than the $11 billion projected by analysts. The results mark progress in Chief Executive Officer Elliott Hill’s push to reset Nike by clearing out old inventory and reorganizing its corporate structure, including replacing many top executives. Nike has suffered from a prolonged sales slump after previous management pulled back too aggressively from longstanding wholesale partners and overemphasized casual footwear over performance products such as running shoes. Bloomberg Intelligence Senior Analyst for E-Commerce and Athleisure Poonam Goyal joins Bloomberg Businessweek Daily to discuss. She speaks with Carol Massar and Tim Stenovec.

Nike Inc.’s turnaround efforts are starting to pay off as the world’s largest sportswear company realigns the business around sports such as running and basketball.

The company said efforts to roll out new products, boost marketing efforts and clear out old inventory helped blunt a longtime sales slump — results that buoyed shares in Nike by about 4% in premarket trading.

The stock had dropped about 8% this year through Tuesday’s close as investors waited for Nike to show signs that its comeback bid is actually working. On Wednesday, Nike’s better-than-expected results also boosted European sportswear stocks, with both Adidas AG and Puma SE shares climbing.

Sales at Nike fell 1% on a currency-neutral basis in its most-recent quarter, the company said, a smaller drop than investors anticipated. Gains at Nike’s wholesale and running shoe business, previous weak spots, helped fuel sales of $11.7 billion, more than the $11 billion expected by Wall Street.

The company expects sales to decline in the low-single digits in the current quarter — in line with projections.

Still, Chief Executive Officer Elliott Hill stopped short of proclaiming victory. “We know we have a lot left to prove,” he said on a conference call with investors and analysts.

Hill has tried to reset Nike by clearing out old inventory and reorganizing its corporate structure. He laid off less than 1% of its corporate staff, replaced a slew of top executives and mended ties with longstanding wholesale partners. He also reframed the company’s focus on sports and product development over casual footwear and other fashion items.

One early bright spot appears to be running, a category that has been crushed by competitors such as On and Hoka. Hill said that Nike has redesigned its three big running franchises – Vomero, Structure and Pegasus – and that’s driving over 20% sales growth in the category in the current quarter.

Nike’s women’s business could also see a bump from the debut of NikeSkims, its new line with entrepreneur and reality TV star Kim Kardashian’s Skims underwear label. After a series of delays, Hill said that shopper response to the NikeSkims launch was “very strong.” A global rollout is planned for 2026.

The company is also returning to Amazon.com Inc. for the first time in six years, and its sneakers are now front-and-center at Foot Locker’s stores. Last quarter, wholesale revenue rose 5% on a currency-neutral basis to $6.8 billion, beating the average analyst estimate.

Hill trumpeted progress in running and wholesale, but said Nike’s comeback “won’t be perfectly linear.”

Analysts, similarly, cheered the quarter’s improvements. The “turnaround is mostly on track,” but the story remains balanced by a still-skeptical medium to long-term view,” said Morgan Stanley’s Alex Straton.

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