Nike CEO Faces Tough Challenge as Company Battles Sales Decline

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Nike,CEO,Sales Decline

Nike's new CEO, Matthew Hill, is facing a major challenge as the company grapples with a sales decline. Analysts predict a significant drop in sales and profits, attributed to Nike's efforts to revamp its product assortment by scaling back on popular but overexposed franchises. This strategy, while aimed at restoring the brand's coolness, has led to short-term pressure on sales, impacting retailers like Foot Locker. Hill's task extends beyond product strategy to reviving Nike's innovation, strengthening relationships with wholesalers, and fostering a positive company culture after recent layoffs.

Here's what analysts are expecting from the world's largest sneaker company, according to consensus estimates from LSEG:Analysts are expecting sales to drop more than 9% from the year-ago period and profits to plunge by about 38%.

The dismal outlook comes as Nike works to turn around its business and fix its product assortment by pulling back on three of its key franchises: Air Force 1s, Dunks and Air Jordan 1s. Those stylesunder former CEO John Donahoe, but then became so commonplace that they lost their cool factor. Now Nike is trying to cut back supply.

Nike has warned that strategy will pressure sales in the short term. But it has also affected Foot Locker, which missed Wall Street's estimates on the top and bottom lines in its third-quarter report Dec. 4 in part because of soft demand for Nike products, its CEO Mary Dillon told CNBC at the time. Foot Locker's dismal quarter was a warning sign for Nike and a clue that investors may need to be patient as they wait for the sneaker giant to turn its business around. When Nike reports earnings Thursday, Hill will have been in the new role for just over two months, and it's going to take time to see the effects of strategy changes.Hill has his work cut out for him beyond fixing Nike's product assortment.

Since taking over, he has scored a few wins. The National Football League announced Dec. 11 that it had

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