Nike has announced on that it would withdraw its annual revenue forecast as the company prepares for a holiday season likely characterized by discounts and weak traffic on its website and mobile apps.

This announcement coincides with the impending leadership transition, as Elliott Hill is set to take over as CEO from John Donahoe.

The news triggered a 6% decline in Nike’s shares during after-market trading. Earlier in the day, shares had fluctuated after the company reported disappointing quarterly sales growth, despite surpassing Wall Street profit expectations.

Nike has experienced a recent stall in growth, pressured by more agile competitors such as On and Deckers’ Hoka.

“We expect that the return to strong growth will take time,” said Nike Chief Financial Officer Matt Friend. “But we believe we have all the right building blocks, especially with Elliott now leading us.”

Last month, Nike announced Hill’s return to the company, aiming to steer it back on course. Friend emphasised that withdrawing the annual revenue forecast would allow Hill the flexibility to assess the company’s strategies and “develop plans to best position the business for fiscal 2026 and beyond.” Previously, Nike had anticipated a mid-single-digit decline in annual revenue.

In lieu of an annual outlook, Nike provided projections for the September-November quarter, predicting a sales drop of 8% to 10%, exceeding analysts’ predictions of a 7% decline.

The company also expects gross margins to decrease by approximately 150 basis points during this period.

Hill’s primary focus will be on revitalising Nike’s wholesale partnerships, which had diminished under Donahoe’s leadership.

This shift in strategy led retailers like Foot Locker and Dick’s Sporting Goods to fill the void with trendy competitors.

“When we say things like ‘we need to sharpen our focus on sport,’ it doesn’t just mean we need to sell more performance products,” Hill noted.

 “What it means is that we have to create deeper connections with consumers through sport.”

Nike’s overall net revenue for the first quarter dropped 10.4% to $11.59 billion, slightly worse than the 10% decline projected by analysts.

Analysts have expressed concern over the company’s inability to capitalise on its push for innovation and the launch of new products like the Air Max Dn and Pegasus 41.

“I am pretty disappointed by the revenue number here,” said Dave Wagner, head of equities at Aptus Capital Advisors, which holds a stake in Nike.

“This is not a great report, both from a quantitative standpoint and from a qualitative standpoint of canceling the investor day.”

As Nike prepares for this pivotal transition, the coming months would be critical in determining the company’s ability to reclaim its footing in the competitive sportswear market.

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