**Nike's Fiscal Q1 Earnings Anticipated Amid Leadership Transition and Market Challenges**

Nike is set to release its fiscal first-quarter earnings after the market closes today, with analysts from LSEG forecasting earnings per share of 52 cents and revenue of $11.65 billion. Investors are preparing for potentially disappointing results, with sales expected to decrease by 10% and profits to plunge by nearly 45% compared to the same period last year.

In September, Nike announced a significant leadership change, with CEO John Donahoe preparing to step down and Elliott Hill, a company veteran, set to take over on October 14. Donahoe, who has been at the helm for four years, has overseen an over 31% growth in annual sales, primarily through legacy lines such as Air Force 1s, Dunks, and Air Jordan 1s. However, the company has been criticized for lagging in innovation and losing market share to competitors.

During Donahoe's tenure, Nike shifted its focus to direct-to-consumer sales via its websites and stores, often at the expense of relationships with traditional wholesalers like Foot Locker and DSW. Now, Elliot Hill, who spent 32 years at Nike before retiring in 2020, is anticipated to revitalize the innovation pipeline, rebuild wholesaler relationships, and address internal cultural and morale issues stemming from recent layoffs.

Nike's performance has been further complicated by a stagnant consumer market in the U.S., where discretionary spending on clothing and footwear has slowed. Projections indicate a mere 2% growth in U.S. footwear sales for 2024, following negligible changes between 2022 and 2023. Athletic footwear is expected to fare slightly better, with an anticipated growth rate of about 5.6%.

Another significant factor is Nike's performance in China, its third-largest market by revenue. Recent economic challenges in the region have impacted the company's outlook, though China's central bank has recently implemented substantial stimulus measures expected to boost economic conditions. Executives may discuss current sales performance in China during the earnings call, even though the fiscal first quarter ended before these measures took effect.

Nike's stock closed at $88.40 on Monday, marking a roughly 19% decline in 2024, notably underperforming the S&P 500's 21% gain in the same period. Investors will keenly be watching the earnings report and conference call for insights into Nike's strategic direction under Hill's upcoming leadership.