Consumer Discretionary

Nike’s $2 billion cost-cutting plan will focus on product innovation, storytelling and competitive separation, CEO John Donahoe says in a call with analysts. The shoe and apparel company is introducing new franchises and concepts to elevate its offerings, even though it will take time for the innovation cycle to ramp-up. Nike’s Jordan Brand, women’s and running businesses need investments to reach their full potential, Donahoe says. The Jordan Brand is on a path to become the second-biggest footwear brand in North America. At the same time, about 40% of Nike’s customers are women and their demand for more products is growing. Nike’s shares drop 7.2% to $113.77 in after-hours trading.

Nike’s restructuring plan aims to compete and win in the current market, CEO John Donahoe says in a call with analysts. The shoe and apparel company, which focused on liquidating excess inventory in the 2Q in the midst of a highly promotional environment and increasing macro volatility, is seeing signs of cautious spending among customers. “Total retail sales across the marketplace fell short of our expectations with softer demand outside of the key consumer moments,” CFO Matt Friend says. Nike did, however, see strong consumer response to newness and premium innovation. The company is reducing management layers as part of its cost-cutting measures. Shares drop 9%, to $111.50, in after-hours trading.

By Sabela Ojea Nike cut its revenue outlook for the year amid concerns that consumers around the world are becoming more cautious with their spending. The sneaker and apparel company on Thursday said it anticipates softer sales for the second half of the year. It also plans to shave up to $2 billion in costs over the next three years through streamlining the organization and shedding employees among other moves. Shares plunged nearly 11% in after-hours trading. For the fiscal year ending in May, Nike now expects revenue growth of about 1% from the prior year, down from its prior forecast of revenue rising by a mid-single-digit percentage. Nike dealt with soft demand outside of heavy shopping moments like those tied to back-to-school shopping and Black Friday, Chief Financial Officer Matt Friend told analysts on a conference call. The company also experienced weaker traffic to its digital platforms and competitors

The following is a summary of the NIKE, Inc. (NKE) Q2 2024 Earnings Call Transcript: Financial Performance: NIKE reported its second $13 billion quarterly earning, with over 20% growth in earnings per share. The holiday season saw growth nearing 10% with the strongest Black Friday week in company history. Marginal growth of 1% was reported in Q2 revenue, spurred by disciplined execution and marketplace management, with NIKE Direct experiencing a 4% growth. A 44.6% expansion in gross margins due to strategic pricing, increased supply-chain efficiency, and improved markdowns, mitigated only partly by increased product input costs. Double-digit drops were observed in total footwear and apparel inventory units, signifying progress in inventory management. Business Progress: The company is directing efforts towards areas with significant growth potential, such as the Women’s and Jordan divisions. Significant advancements were made in sports innovation, backed by the recognition received by athletes using NIKE products. Plans

By Sabrina Escobar Wall Street is feeling more upbeat about Nike’s 2024 outlook — but analysts are a lot more tepid about the retailer’s earnings report coming Thursday afternoon. Over the past few months, Street sentiment on Nike stock has been improving. Investors have rallied behind the prospect of bigger margins now that the company is seeing better freight costs and less discounting. Just last week, Citi analyst Paul Lejuez upgraded shares of Nike to Buy from Neutral, arguing that Nike is an “attractive margin recovery story” amid a choppy macroeconomic environment. And earlier in December, Wells Fargo analyst Ike Boruchow added Nike to his top picks list, swapping out competitor Lululemon Athletica in the process. “We simply believe the recovery characteristics and self-help story now beginning at [Nike] make for a more compelling long idea into 2024,” Boruchow wrote at the time. But first, the company has to wrap