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Nike (NKE+0.26%) appears to be find its footing under new CEO Elliott Hill, reporting second-quarter earnings on Thursday that were better than feared. Shares jumped over 9% in after-hours trading, offering a glimmer of hope after Nike’s had stock dropped 27% so far this year.
“Our priority is to return sport to the center of everything we do,” Hill said in a statement. “We’re taking immediate action to reposition our business, so we can get back to driving long-term shareholder value.”
Nike beat Wall Street’s expectations. During the second quarter, the company reported revenue of $12.35 billion, about 78 cents per share. Analysts had forecast it would generate revenue of $12.13 billion, or about 63 cents per share.
The global apparel giant has struggled to regain momentum amid growing competition from brands such as Hoka (DECK+1.89%) and Skechers (SKX+0.35%). In June, Nike warned it would need to reassess its fiscal 2025 outlook, citing slower digital growth, a decline in demand for classic footwear styles, shifting consumer preferences, and broader economic challenges.
Hill, a Nike veteran who started as an intern, is taking charge at a critical time. In addition to overhauling Nike’s product lineup, he said he plans to repair relationships with wholesalers and address internal issues, including boosting morale after a series of layoffs.
Analysts say that while change will take time, Hill is well-positioned lead Nike back to growth. Under his leadership, the company grew to more than $39 billion in annual revenue. In a research note, financial firm Jefferies (JEF-0.66%) said Nike’s latest earnings exceeded its modest expectations but cautioned “there’s still a lot of wood to chop.”
To address declining sales, Nike has started scaling back production of overexposed models, including its Air Force 1s, Dunks, and Air Jordan 1s, which lost appeal due to over-saturation in the market.
Despite those struggles, Hill has secured some key victories. Nike recently renewed its contract with the National Football League, keeping its exclusive uniform deal through 2038. The deal is a critical endorsement of Hill’s leadership after the NFL considered other bidders.
