Just Doing it: NIKE boss says the brand's comeback is in 'middle innings'
NIKE on Thursday reported Q2 revenue of $12.4 billion, as its recovery focuses on realigning, rebuilding, and rebalancing.
NIKE Inc CEO Elliott Hill was full of metaphor, in his commentary to shareholders, as the sportswear brand's second quarter featured $12.4 billion of revenue.
Whilst comments on the analyst call were frank - with Hill describing the numbers as 'nowhere near' Nike's potential but 'slightly better' than feared when the brand flagged a profit warning in late summer.
At $12.4 billion revenue was up 1%, albeit flat on a currency-neutral basis, meanwhile, earnings came in at $0.53 per share, versus $0.78 a year ago.
Wholesale revenues were up 8% to $7.5 billion, up 8%, though its straight-to-consumer vertical NIKE Direct saw an 8% decline in revenue to $4.6 billion.
Gross margin decreased 300 basis points to 40.6% and net income was $0.8 billion, down 32% year-over-year.
Whilst the number tell one story, Nike boss Elliot Hill gave investors a narrative fit for the backpages.
“NIKE is in the middle innings of our comeback," Hill said, whilst emphasising a confidence that its action will drive growth and profitability for the long term.
“Fiscal 26 continues to be a year of taking action through 'Win Now', including realigning our teams, strengthening partner relationships, rebalancing our portfolio, and winning on the ground," he added.
"We’re finding our rhythm in our new sport offense, and setting ourselves up for the next phase of athlete-centered innovation in an elevated and integrated marketplace.”
Nike CFO Matthew Friend, meanwhile, described shifts to position "for a full recovery".
“In the second quarter, we demonstrated the resilience of our portfolio, delivering modest top-line reported growth while managing headwinds from repositioning our business in a dynamic operating environment,” Friend said.
In New York, Nike stock fell more than 10% in afterhours trade, losing $7.11, to $58.50.
The Recap
- NIKE reported second-quarter revenues of $12.4 billion and diluted EPS $0.53.
- Wholesale sales rose to $7.5 billion, NIKE Direct revenues fell.
- Conference call held at 2:00 p.m. PT on 18 December.
