• Nike beat Wall Street's expectations on the top and bottom lines under new CEO Elliott Hill.
• The longtime Nike veteran, who returned in October, said the company is focused on turning the business around and returning "sport" to the center of everything it does.
• Nike has been accused of falling behind on innovation and focusing too much on lifestyle products over the performance styles it had long been known for.

Nike on Thursday posted better-than-expected results under new CEO Elliott Hill, who said the company is taking "immediate action" to fix the business and return it to growth.

While expectations were low for the company headed into the release, the sneaker giant handily beat Wall Street's expectations on the top and bottom lines.

Here's how Nike did in its fiscal second quarter of 2025 compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

• Earnings per share: 78 cents vs 63 cents expected
• Revenue: $12.35 billion vs $12.13 billion

Nike shares initially spiked following the results but pared gains after Hill delivered his opening remarks on a call with analysts. The stock was last seen down about 2%.

Nike's reported net income for the three month period ended Nov. 30 fell to $1.16 billion, or 78 cents per share, compared with $1.58 billion, or $1.03 per share, a year earlier.

Sales fell to $12.35 billion, down about 8% from $13.39 billion a year earlier.

"After an energizing 60 days of being back with my NIKE teammates, our clear priority is to return sport to the center of everything we do," Hill said in a news release. "Our team is ready to go, and I'm confident you will see more moments of NIKE being NIKE again."

Hill, who started with Nike as an intern in the 1980s before leaving the company in 2020, is tasked with turning around the world's largest sportswear company after it fell behind on innovation, ceded market share to competitors and botched its selling strategy.

The company is already in the midst of fixing its product assortment and has been steeply discounting to clear out inventory. Under former CEO John Donahoe, the company grew on the back of three key franchises — Air Force 1s, Dunks and Air Jordan 1s — but now, the shoes have become so commonplace that they've lost their cool factor.

As a result, Nike is trying to cut back supply, which it has said will impact sales in the short term, but hopefully not the long term.

During the most recent quarter, sales at Nike's store and online were down 13% while wholesale revenues were down 3%. The steep discounting contributed to a 1 percentage point decline to gross margin, which came in at 43.6%, slightly better than the 43.3% StreetAccount analysts had expected.

Inventory, another area for concern, was flat compared to the prior year at $8 billion. Units were up, but that was offset by lower product input costs and a shift in product mix.

While Nike saw sales down in all four of its geographies, results were better than expected in all regions except for China, which saw sales decline 8% to $1.71 billion, below the $1.75 billion StreetAccount had expected.

In North America, Nike saw sales of $5.18 billion, an 8% decline but ahead of the $5.01 billion Street Account had expected. In Europe, Middle East and Africa, sales were down 7% to $3.30 billion, slightly ahead of the $3.26 billion StreetAccount had expected. And in Asia Pacific and Latin America, sales fell 3% to $1.74 billion, ahead of the $1.62 billion analysts had expected. 

Converse, which Nike acquired in 2003, has also dragged down the company's overall performance with sales down 17% during the period to $429 million, far below the $462.6 million that analysts polled by StreetAccount had expected.

Nike's shift away from Dunks and Air Force 1s as well as its steep discounting 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.

Hill has been in the new role for just over two months, and has his work cut out for him beyond fixing Nike's product assortment. He'll need to power up Nike's innovation pipeline, reset its relationships with wholesalers and improve morale after a series of layoffs and a breakdown in culture. 

Since taking over, he has scored a few wins. The National Football League announced Dec. 11 that it had renewed its contract with Nike after it briefly courted other bidders. Amid criticism for falling behind on innovation and botching a uniform release for Major League Baseball, the NFL's decision to renew its contract with Nike through 2038 was a major vote of confidence. 

Now, Nike is the exclusive uniform provider for the NFL, MLB, and the National Basketball Association.

Shares of Nike were down about 27% in 2024 as of Wednesday afternoon, compared with a roughly 27% gain for the S&P 500.