Nike on Tuesday said it was withdrawing its full-year guidance and postponing its investor day as it gears up for a new CEO to take the helm.

Last month, the company announced that CEO John Donahoe would be stepping down in October and replaced with longtime company veteran Elliott Hill, effective Oct. 14. Given the impending CEO change, the company has decided to withdraw its full-year guidance and intends to provide quarterly guidance for the balance of the year, executives said.

“This provides Elliot with the flexibility to reconnect with our employees and teams, evaluate the current strategies and business trends and develop our plans to best position the business for fiscal ’26 and beyond,” finance chief Matthew Friend said on an earnings call with analysts.

When reporting fiscal fourth-quarter results in June, Nike cut its guidance for fiscal 2025 and said it was expecting sales to be down mid-single digits after it previously expected them to grow. Friend said since the fiscal year started, the company’s “revenue expectations have moderated… given traffic trends on Nike Digital, retail sales trends across the marketplace and final order books for spring.”

“We continue to see indications of slight second-half improvement in revenue trends versus our first half,” said Friend. “As we plan to introduce and scale newness and innovation across the marketplace, we now expect gross margins to decline versus the prior year.”

Nike said it expects revenue in its current quarter to be down between 8% and 10% and gross margin to be down about 1.5 percentage points. That’s worse than the 6.9% drop in revenue that LSEG analysts had expected.

It’s also postponing its investor day, originally scheduled for November. It’s unclear when the meeting will be rescheduled. 

Shares fell about 5% in extended trading after the updates and after Nike delivered mixed results for its fiscal first quarter.

Here’s how the world’s largest sneaker retailer performed compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

• Earnings per share: 70 cents vs 52 cents
• Revenue: $11.59 billion vs $11.65 billion

The company’s reported net income for the three-month period that ended August 31 was $1.05 billion, or 70 cents per share, compared with $1.45 billion, or 94 cents per share, a year earlier.

Nike beat earnings expectations by 18 cents, but it fell short on revenue as it works to fix its product assortment and rework its approach to innovation.

Sales dropped to $11.59 billion, down about 10% from $12.94 billion a year earlier.

Nike’s gross margin grew by 1.2 percentage points in the quarter to 45.4%, higher than the 44.4% that StreetAccount analysts had expected. Still, profits fell by nearly 28% during the quarter.

Over the last year, Nike has been accused of falling behind on innovation and ceding share to competitors as it focused on selling directly to consumers through its own websites and stores rather than through wholesalers such as Foot Locker and DSW. 

At first, the strategy was a boon to Nike’s profits and sales during the Covid pandemic, but as it scaled, it got more complex and consumers started returning to stores and other in-person activities.

During the quarter, Nike Direct sales were down 13% to $4.7 billion, while Nike digital sales were down 15%.

Critics say Nike’s focus on direct selling also led it to take its eye off innovation.

Under Donahoe’s leadership, the company grew annual sales by more than 31%, but it got there by churning out legacy franchises such as Air Force 1s, Dunks and Air Jordan 1s — not the groundbreaking styles that turned the company into a global powerhouse. 

Sales for those legacy franchises are no longer boosting sales in the same way they had previously, and as a result, the company has worked to cut off supply to drive up demand and recapture their cool factor.

During the first quarter, sales for those franchises declined more than the overall business. Online sales for Air Force 1s, Dunks and Air Jordan 1s combined were down nearly 50%. Jordan brand alone was down double-digits during the quarter, and the company expects it to be down at the same rate for fiscal 2025.

The company also expects overall online sales to be down double-digits in fiscal 2025.

Last year, Donahoe started to acknowledge Nike needed to mend its relationships with wholesalers, but the company’s board decided that Hill, who spent 32 years with Nike before retiring in 2020, would be the right person to lead its next chapter. 

Hill is known to be well-regarded among Nike’s retail partners, when he takes over later this month, he’ll have work to do to rebuild those relationships.

Wholesalers have previously spoken out about Nike’s product lineup and how the same old recycled franchises weren’t doing enough to drive sales. They’ve also been working to keep their own inventories in line and have been careful about ordering too much product.

Nike’s fiscal first-quarter wholesale revenue was down 8% to $6.4 billion.

“The multi-brand environment is very competitive today, and it will take time to expand market share. This was reflected in our spring ’25 order books, which came in roughly flat versus the prior year,” Friend said on the earnings call, adding orders were a “little lighter” than expected.

Compounding the issue is the overall sneaker market, which has been relatively stagnant in the U.S., and a slowdown in consumer spending on discretionary goods such as new clothes and shoes.

Footwear sales in the U.S. are projected to grow by just 2% in 2024 compared with 2023 after barely budging between 2022 and 2023, according to Euromonitor. Athletic footwear is expected to grow by about 5.6%, the firm said. 

During the most recent quarter, Nike footwear sales in North America were down 14%, and apparel sales fell 10%.

Converse, which Nike acquired in 2003, is also weighing down the company’s overall performance. Sales fell 15% to $501 million during the quarter but performed better than the $493 million that analysts had expected, according to StreetAccount.

China’s central bank recently unveiled its largest stimulus measures since the Covid pandemic, which is expected to give the region’s economy a much-needed boost. 

Nike’s fiscal first quarter concluded prior to those stimulus measures, but executives may share color on how sales are performing during the current period. 

Shares of Nike closed at $89.13 on Tuesday, down about 18% so far in 2024, significantly underperforming the S&P 500’s gains of about 20%.