Nike CEO says sneaker giant lost its obsession with sport, vows to revive iconic brand

Nike’s results beat modest estimates on Thursday and its shares jumped briefly, but the company soon dashed investor hopes and sent shares lower when a top executive predicted revenues would fall by double digits in the third quarter.Nike’s new CEO Elliott Hill warned of short-term pain as the embattled sportswear seller works to revive tepid demand for its brands.Shares of Nike surged 11% immediately after the earnings report but gave up those gains after Hill and CFO Matthew Friend reined in expectations.Hill said in his first earnings call since taking the helm in October that Nike “lost its obsession with sport,” vowing to right the ship by refocusing its business on sport and selling more items at premium prices.Nike’s quarterly profit beat modest expectations.

Revenue also fell less than expected as newer versions of performance and running shoes attracted shoppers.So far this year, Nike shares have slumped nearly 30%.Analysts said Hill faces tough critics and a long slog to claw back lost market.Hill told the call he was prioritizing rebuilding Nike’s retail partnerships, boosting innovation and ensuring discounts and promotions are limited to traditional retail moments, and not at the consistent rates at which they have been employed lately.“We’ve become far too promotional,” Hill said, speaking in lively, impassioned tones.

“The level of markdowns not only impacts our brand but disrupts the overall marketplace and the profits of our partners.”With rivals launching more comfortable, better cushioned shoes, Nike has been scrambling to regain dominance in the market, shelling out money to introduce new products like Air Max 95, and to promote staple franchises like Jordans and Pegasus.Last month, the company under Hill announced it would double down on three running franchises – Pegasus, Structure and Vomero – by launching various iterations of each shoe next year, at different price points.Hill has been popular w...