"No CEO, no Guidance, no Investor Day. Nike is deep in the abyss of the turnaround," is how Bernstein analysts Aneesha Sherman and Jessica Tian opened a note to investors. This highlights the uncertainty facing Nike as it transitions leadership and grapples with declining sales, while trying to realign its strategic vision under Elliott Hill's guidance after a rocky path in recent years."
Nike slightly beat earnings expectations for the latest quarter even as sales declined 10% year-over-year, in line with Wall Street's expectations. The company did cut revenue guidance for next quarter by 8-10%, however, which was slightly worse than expected. Analysts noted that they would have preferred an earlier cut for the first half of next year to better manage expectations during Hill's leadership transition."
Sherman and Tian commented on the decision to withdraw guidance completely, stating this was akin to management offering a "complete black box, which will likely weaken confidence short-term." This reflects concerns that an absence of clear direction during a leadership transition may result in further declines in investor trust and stock performance in the near term.
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