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Nike Inc. (NKE:US) fell 6% in premarket trading after the firm announced it was withdrawing its 2017 revenue projection. This action has left investors concerned about the timetable for a potential recovery as incoming CEO Elliott Hill prepares to take over the global sportswear brand. Additionally, Nike postponed its previously announced investor day, which was slated for November 19. CFO Matthew Friend noted that retracting the outlook allows Hill to reassess the company's strategies and review current business trends.
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Elliott Hill, a longtime Nike executive, was named CEO this month, succeeding John Donahoe. Under Donahoe's tenure, Nike faced increased competition from brands like On Holding and Hoka, notably in the performance running shoe sector, where these competitors have made considerable advances. Despite efforts to boost demand with new product launches like as the Air Max DN and Pegasus 41, Nike has struggled to see significant sales growth. In the first quarter, footwear sales in the United States and Europe plummeted 14%, while sales in Greater China fell 3%. Overall net revenue fell 10.4% to $11.59 billion, slightly below than analysts' expectations of $11.65 billion, according to LSEG.
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However, Nike outperformed earnings estimates, with first-quarter profits of $0.70 per share, above analysts' forecast of $0.52. The company attributed some of its recent sales performance to greater promotional activities, which was required to enhance revenue during the quarter. Looking ahead, Nike has hinted at additional issues throughout the holiday season.
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On the Congressional trading front, Nike's stock has received conflicting reactions from investors since the second part of 2024. Congresswoman Kathy Manning decreased her position in the corporation, while Senator Shelley Moore Capito boosted her ownership. Additionally, Congressman Ro Khanna has been actively trading the stock, demonstrating a range of emotions among US politicians.
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