NKE: Nike Stock Sinks as Sales Dive 10%, Profits Plunge and Guidance Gets Canceled

Nike withdrew its annual revenue forecast and postponed its investor day as the company was preparing to swap chief executives.

• Nike stock NKE slipped 6% in after-hours trading Tuesday following the company’s disappointing earnings report. Even though the shoe maker’s earnings were higher than expected, they were much lower than the year-ago quarter. Nike earned 70 cents a share against 52 cents expected, leading to net income of $1.1 billion, or a 28% drop year over year. Revenue sank 10% from a year ago to $11.6 billion, roughly in line with consensus views.
• The world’s largest maker of athletic gear withdrew its annual revenue guidance citing the ongoing C-Suite reshuffle. Nike is now in the process of switching chief executive with current CEO John Donahoe stepping down October 14. He will be succeeded by company veteran Elliott Hill (who started out as an intern). Nike also postponed its investor day event.
• ”Looking forward, our revenue expectations have moderated since the start of the year, given traffic trends on Nike digital, retail sales trends across the marketplace, and final order books for spring,” said Matthew Friend, Nike’s chief financial officer, on the earnings call Tuesday. Shares of Nike are down 16% before the pre-market drop gets factored in at the opening bell today.