Why Nike Stock Sank Today

Shares of athletic apparel maker Nike (NYSE: NKE) sank on Wednesday after the company reported financial results for its fiscal first quarter of 2025, pulled its full-year guidance, and delayed its upcoming investor-day presentation. As of 10:30 a.m. ET today, Nike stock was down 7%.

Nike's unanswered questions

Nike just hired Elliott Hill as its new CEO, but he doesn't start for about another two weeks. It's unfortunate for investors because they need to stay patient when it comes to this year's financial goals and the company's long-term vision -- it's reasonable to allow Hill time. And in the interest of giving him time, Nike officially postponed the investor day it had planned for November and withdrew its financial guidance for this year.

With these changes, investors don't quite know what to expect this year and beyond for Nike, which partly explains the negative reaction today. But investors are also looking at the numbers. The company had first-quarter net income of $1.1 billion, which was better than expected. But these profits were still down 28% year over year.

Moreover, first-quarter revenue of $11.6 billion was down 10% and down slightly more than expected, which is why the stock dropped 7%.

The business is still in a downward trend

Nike officially pulled its full-year guidance because of the timing of its CEO hire. But management said enough for investors to know that it would have modified guidance anyway.

It originally expected fiscal 2025 revenue to drop by a mid- to single-digit percentage. But management now admits that revenue is currently trending even lower than those expectations. Moreover, it had expected its gross margin to improve but now expects margins to continue to fall.

To be sure, Nike is facing some headwinds. And now investors await a plan from its promising new CEO to stabilize the business and take back market share.

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Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy.