Anxiety is reportedly spreading at Nike as executives are telling employees to curb excess spending in the midst of disappointing earnings, which sent the storied company’s stock plummeting by 14% on Wednesday afternoon.
Elliott Hill, the veteran Nike honcho who came out of retirement to assume the chief executive role, pleaded with employees to help turn the footwear giant around during an all-hands meeting on Tuesday, according to Bloomberg News.
“I’m so tired, and I know you are too, of talking about fixing this business,” he was quoted as saying.
“I want to move to inspiring and driving growth and having fun.”
Nike CFO Matthew Friend warned employees to tighten spending as the company grapples with a faltering turnaround, telling staff they must be disciplined about where money is allocated because the business “is not moving in the right direction,” according to a recording of the meeting.
“We’re going to be managing costs carefully as we have been doing,” the CFO said.
“I realize that that creates a tension inside, but I just need you to know that the reason why that tension is there is because our business is not moving in the right direction.”
Nike beat Wall Street expectations in its latest quarter, posting earnings of 35 cents per share on $11.28 billion in revenue, but profits plunged 35% year over year as margins shrank under pressure from higher tariffs and discounting, according to results released Tuesday.
The company delivered a mixed regional picture, with North America revenue rising 3% to $5.03 billion while greater China — a key growth engine — continued to deteriorate, with sales falling 7% to $1.62 billion despite topping analyst estimates.
Investors zeroed in on Nike’s weak outlook, which overshadowed the earnings beat and sent shares sharply lower.
The company warned that sales will drop 2% to 4% in the current quarter and decline for the rest of the calendar year, driven in part by an expected 20% plunge in China.
Over the past five years, Nike’s financial performance has been marked by stagnation at the top line and a sharp erosion in profitability.
“If Nike’s recovery is a marathon rather than a sprint, then the company seems to be hitting a wall,” wrote Russ Mould, investment director at AJ Bell.
“Pleas for patience from CEO Elliott Hill, a Nike lifer who returned from retirement to lead the company, are falling on deaf ears.”
Nike’s stock has fallen by more than 65% since April 2021. The Post has sought comment from the company.
