Zhitong Finance learned that Nike (NKE.US) will announce its latest quarterly performance in post-market trading on Tuesday, which will be the first financial report released by the company since the new CEO was announced earlier this month. According to analysts compiled by LSEG, Nike's first-quarter revenue is expected to decrease by 10% to $11.65 billion, the largest drop in more than four years; earnings per share are expected to decrease by 44.7% to 52 cents.

Nike announced on September 19th that Elliott Hill will take over as CEO from John Donahoe starting October 14th. Hill, who previously worked for this sportswear giant for 32 years, retired in 2020. Hill faces a challenging task of reversing the decline in market share of this once dominant brand, which is now being challenged by smaller, more agile competitors such as Decker, newly launched brand Hoka, and On supported by Roger Federer.

Jay Woods, Chief Global Strategist at Freedom Capital Markets, said, "This will be one of those quarters where they may try to get rid of as much bad news as possible, address it, and start fresh."

Woods hopes investors will give Hill a "grace period," but adds, "The question is, with his experience and deep connection to the iconic Nike brand, can he... bring some magic back?"

Four investment banks lowered Nike's target stock price this quarter, but after Nike announced Hill's reappointment, five investment banks raised their target stock price. Since Hill was appointed CEO, Nike's stock price has risen by more than 10%, offsetting some of the losses from the worst day in history in June.

Investors will also closely monitor any boost from the Paris Olympics. Research firm Similarweb stated in August that Nike and Puma saw a significant increase in visits to their direct-to-consumer websites in the first week, translating into a large proportion of sales.

Innovation challenges.

After losing to Hoka and On, Nike had to release some products early. The stylish and comfortable footwear series from Hoka and On are resonating with consumers. Aptus Capital Advisors' stocks head Dave Wagner, who holds Nike shares, said: "If you look at any retail brand, especially footwear brands, you will find that newcomers seem to have taken all the charm here. Nike needs to do more innovation, but they are just falling behind now."

Nike has launched new athletic running shoes like Air Max Dn and Pegasus 41 in the past two quarters, and announced plans to introduce a new line of athletic footwear priced below $100 to attract cost-conscious consumers. However, these measures have not shown significant results yet.

At the same time, the company has also relaunched some shoes with only minor adjustments to colors, etc. Jessica Ramirez, senior analyst at Jane Hali & Associates, believes that this is not good enough. Ramirez said: "I don't think the second half of the year is favorable for Nike... not until we see the new products for 2025."