Business

Costco launched platinum bars on its website for $1,089.99, an addition to the company’s precious metals selection of gold bars and silver coins.
Gold bars launched at Costco in August 2023, and not even two months later were selling out within hours of a restock.
While the value of gold has risen consistently in the last five years, platinum has not held up as well. The value of platinum has risen more than 15% over the past 12 months, though it has dropped over 8% since May.

Arrows pointing outwards

Source: Costco

Costco continues to chip away at the gold mine that is the precious metals market. The wholesaler is adding Swiss-made platinum bars to its selection.
Costco on Wednesday announced the 1-ounce platinum bars, on sale for $1,089.99 on its website alongside its now-famed gold bars and silver coins. The bars are only sold online, and cannot be delivered to Louisiana, Nevada or Puerto Rico, the company said. Interested buyers will also need a Costco membership, which costs between $65 and $130 a year.

It’s no surprise the company has continued to delve into the precious metals market. Gold bars launched at Costco in August 2023, and not even two months later were selling out within hours of a restock. Analysts at Wells Fargo reported in April that Costco was selling as much as $200 million worth of gold bars a month.
“I’ve gotten a couple of calls that people have seen online that we’ve been selling 1-ounce gold bars,” said Richard Galanti, then-chief financial officer of Costco, on the company’s earnings call in September 2023. “When we load them on the site, they’re typically gone within a few hours, and we limit two per member.”
The value of gold has risen more than 40% in the past year and over 70% in the last five years. But the price of platinum has been a little more rocky in recent years. The value of platinum has risen more than 15% over the past 12 months, though it has dropped more than 8% since topping $1,100 earlier in 2024.
— CNBC’s Jeff Cox contributed to this report.

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Diamond Sports currently plans to drop all of its Major League Baseball teams from its Bally Sports regional networks, with the exception of the Atlanta Braves.
Bally Sports networks have been dropping teams during its ongoing bankruptcy process. Last year the San Diego Padres and Arizona Diamondbacks exited their regional sports networks.
An attorney for Diamond Sports said it’s still in negotiations with the individual clubs in hopes of maintaining the rights of MLB teams for its networks.

A microphone with the Bally logo is used for a post game interview following the Atlanta Braves 3-0 victory over the Minnesota Twins at Truist Park on June 28, 2023 in Atlanta, Georgia. 
Todd Kirkland | Getty Images

Major League Baseball is out of here.
Diamond Sports — the owner of Bally Sports-branded regional sports networks — said Wednesday that it plans to drop all MLB teams from its channels except for the Atlanta Braves.

Bally Sports has more than a dozen networks across the U.S. Diamond has reached out to all of the 11 teams on its air — the Cincinnati Reds, Cleveland Guardians, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Miami Marlins, Milwaukee Brewers, Minnesota Twins, St. Louis Cardinals, Tampa Bay Rays and Texas Rangers — with amended, proposed contracts, to determine the future of MLB on the networks.
A Diamond attorney made the comments before a U.S. bankruptcy judge on Wednesday as part of an update on the company’s ongoing bankruptcy process and attempt at finalizing a reorganization plan.
Some of those teams were already slated to see their contracts end this season, and some contracts are not being determined by the bankruptcy process, a Diamond spokesperson said.
MLB’s regular season ended earlier this week, and the postseason has already begun. Regional sports networks primarily air regular-season games.
“To be clear, rejecting these teams is not our preferred path,” Diamond attorney Andrew Goldman said on Wednesday. “Our preferred plan is to bring as many teams into the reorganized [company’s] fold as possible.”

He added the company is still in negotiations with the individual clubs, but its discussions with MLB’s Commissioner’s Office have ended.
MLB’s attorney James Bromley on Wednesday told the bankruptcy judge it was “unfortunate we are being sandbagged this way,” and added that “some of our clubs are being left out in the cold again.” A spokesperson for MLB declined to comment.
Goldman said Diamond had warned the league about this outcome in August, noting it was a possibility if the MLB rejected Diamond’s latest proposal.

Curveball

Milwaukee Brewers’ Sal Frelick hits a double during the fourth inning of Game 2 of a National League wild card baseball game against the New York Mets Tuesday, Oct. 1, 2024, in Milwaukee.
Morry Gash | AP

For decades, the regional sports networks were a lucrative business model for the teams and leagues, and networks paid high fees to air games. But they have suffered as cord-cutting has hit the pay-TV business, leading to fewer subscribers.
This — and the heavy debt load Diamond has contended with since Sinclair acquired the business from Disney in 2019 — led the owner of the largest portfolio of regional sports networks to file for bankruptcy in March 2023.
Diamond’s lawyers have been trying to reset those rights payments to reflect so-called market rates. As a result, Diamond has rejected contracts, seeing a number of teams find new TV and streaming homes.
In June, the NBA and NHL voiced concerns about the viability of Diamond’s business, particularly ahead of the seasons that will begin this month.
A Diamond attorney said Wednesday was a “watershed moment” for the company as it was able to file an amended reorganization plan. While Diamond aims to exit bankruptcy protection, the possibility of winding down the business still exists. Still, attorneys said the company promised the NBA and NHL they would honor their contracts through the end of the season.
“Today marks an important step forward for Diamond with the filing of a baseline plan to enable us to emerge from bankruptcy as a viable, go-forward business before year-end,” a Diamond spokesperson said in a statement. “We have delivered proposals to and remain in discussions with our MLB team partners around go-forward plans. We firmly believe that through our linear and digital offerings we have created the best economic and fan-friendly engine for all of our team partners.”
Diamond’s tussles with MLB began before the filing.
Diamond had been pushing unsuccessfully for some time to hold the streaming rights for all MLB teams that air on its networks.
Last year, the San Diego Padres and Arizona Diamondbacks left their Bally Sports networks, and the league began producing and distributing the games on pay-TV bundles and MLB TV instead. More

Ford Motor lost its lead in electric vehicle sales to crosstown rival General Motors during the third quarter, as the automaker’s EV sales growth slowed.
Ford on Wednesday reported a 0.7% increase in third-quarter U.S. new vehicle sales, including a 12.2% increase in EVs compared to a year earlier.

A banner advertises the Ford Mustang Mach-E electric vehicle at a Ford dealership on August 21, 2024 in Glendale, California. 
Mario Tama | Getty Images

DETROIT – Ford Motor lost its lead in electric vehicle sales to crosstown rival General Motors during the third quarter, as the automaker’s EV growth slowed.
Ford on Wednesday reported a 0.7% increase in third-quarter U.S. new vehicle sales, including a 12.2% rise in EVs compared with a year earlier.

The third-quarter results for Ford contributed to a 45% increase in EV sales this year through September to 67,689 units. That compares with GM on Tuesday reporting EV sales of 70,450 units through September, including a roughly 60% year-over-year rise during the third quarter.
Both Ford and GM continue to trail Hyundai Motor, including Kia, in EVs by roughly 18,000 units or more. The South Korean automaker remains a distant second in U.S. EV sales to market leader Tesla.
GM has been significantly increasing its number of EV models, including by offering eight “Ultium-based” EVs for consumers — referring to its electric vehicle architecture and battery technologies. Ford, on the other hand, only has three EVs and is focusing more on expanding hybrid models in the short term.

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Ford, GM and Tesla stocks in 2024

“Different lifestyles and use cases require unique types of power,” Andrew Frick, president of Ford Blue and customer service, said in a release. “We’ve listened to customers to offer them vehicles with powertrains to meet their specific needs, and their response validates our product strategy.”
While Ford has de-emphasized its near-term EV plans, company executives such as CEO Jim Farley have touted the brand’s ranking in sales.

The Ford brand maintains its No. 2 sales position behind Tesla, according to the Detroit automaker.
Regarding Ford’s overall third-quarter sales, the company is expected to have outpaced the industry. Auto industry forecasters such as Cox Automotive and Edmunds project third-quarter sales industrywide will be down roughly 2% compared with a year earlier.
Ford was led by gains in its EVs and hybrid models, which combined to account for 14% of its sales during the third quarter. Traditional vehicles for the automaker were down by 2.8% year over year.
Ford’s U.S. sales this year through the third quarter were up 2.7% compared with a year earlier to more than 1.5 million vehicles sold.

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Liberty Media-owned Formula One and luxury giant LVMH are entering into a 10-year partnership, according to a joint press release from Wednesday afternoon. 
The partnership will officially launch at the start of next F1 season and will include “hospitality, bespoke activations, limited editions and outstanding content.”
LVMH owns brands such as Louis Vuitton, Moet Hennessy and TAG Heuer.

The Race winner trophy is seen in a Louis Vuitton trunk on the grid prior to the F1 Grand Prix of Monaco at Circuit de Monaco on May 26, 2024 in Monte-Carlo, Monaco. 
Bryn Lennon | Formula 1 | Getty Images

Liberty Media-owned Formula One and luxury giant LVMH are entering into a 10-year partnership, according to a joint press release from the companies Wednesday afternoon. 
The partnership will officially launch at the start of next F1 season and will include “hospitality, bespoke activations, limited editions and outstanding content.”

The official arrangement will not be the first time that LVMH and F1 have worked together. F1 worked with one of LVMH’s brands during last year’s Las Vegas Grand Prix and the team-up was a success, according to Liberty Media president and CEO Greg Maffei. 
“The opportunity to scale our commercial arrangements is emblematic of the vision we have for Formula 1 as the business continues to grow its platform,” Maffei said in the release. “We look forward to working with Bernard and Frédéric Arnault in the years to come.”

The Race winner trophy is seen in a Louis Vuitton trunk on the podium following the F1 Grand Prix of Monaco at Circuit de Monaco on May 26, 2024 in Monte-Carlo, Monaco. 
Clive Rose | Getty Images

LVMH owns brands such as Louis Vuitton, Moet Hennessy and TAG Heuer, which will be included in the partnership.
“Both in our workshops and on circuits around the world, it is this incessant search to break boundaries that inspires our vision, and this is the meaning that we want to bring to this great and unique partnership between Formula 1 and our Group,” LVMH Group chairman and CEO Bernard Arnault said in the release.
More details of the partnership are set to come in 2025 and there were no financial details included in the release. 

Liberty Media purchased F1 in 2017 and has turbocharged the league’s growth in recent years.
Netflix released a behind-the-scenes series “Formula 1: Drive to Survive” in 2019 that helped push F1 from a niche sport to a more mainstream audience as viewers became fans after getting to see the personalities of individual drivers. The sport has also gotten a tailwind from social media and content creators, giving people more ways to become fans.
The next Grand Prix is Oct. 20 in Austin, Texas. More

Stellantis reported U.S. sales Tuesday of 305,294 from July through September, a 19.8% decline from the third quarter of 2023.
The automaker was expected to be the worst sales performer of major automakers during the third quarter.
Stellantis’ disappointing sales are the latest problem this week for the carmaker, which cut its 2024 profit margin forecast.

Jeep vehicles are delivered to a dealership on June 20, 2024 in Chicago, Illinois. 
Scott Olson | Getty Images

DETROIT — Stellantis U.S. new vehicle sales continued a yearslong freefall during the third quarter, despite CEO Carlos Tavares’ attempts to correct what he has called “arrogant” mistakes.
The Transatlantic carmaker reported U.S. sales Tuesday of 305,294 from July through September, a 19.8% decline from the third quarter of 2023 and an 11.5% decrease from the prior three months of this year.

Stellantis was expected to be the worst sales performer of major automakers during the third quarter. Auto industry forecaster Cox Automotive had projected a sales decline of roughly 21% for the automaker.
Cox and fellow forecaster Edmunds expect third-quarter sales industrywide will be down roughly 2% compared with a year earlier.
Still, Stellantis said its initiatives to boost sales and correct past mistakes are starting to pay off. The automaker cited a market share increase during the third quarter from 7.2% to 8% as well as an 11.6% reduction in its U.S. vehicle inventory.
“We continue to take the necessary actions to drive sales and prepare our dealer network and consumers for the arrival of 2025 models,” Matt Thompson, Stellantis head of U.S. retail sales, said in a release.
All of Stellantis’ brands except for its niche Fiat unit experienced sales declines in the third quarter, led by more than 40% reductions in Chrysler and Dodge. Its Ram truck brand recorded a roughly 19% decline, while Jeep was off about 6% year over year.

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Stellantis, GM and Ford stocks in 2024.

Stellantis’ third-quarter sales are the latest problem this week for the carmaker, which cut its 2024 profit margin forecast and has been hit with a recall involving popular plug-in hybrid electric Jeep models due to fire risks.
Shares of the company on the New York Stock Exchange are off 41% this year. The stock hit a new 52-week low Tuesday and closed at $13.71, falling 2.4% for the day.
During a June investor event, Tavares said the company would correct “arrogant” mistakes made by himself and the company in the automaker’s U.S. operations that led to sales declines, bloated inventories and investor concerns.
He said the convergence of three factors led to the problems: not selling down vehicle inventory fast enough; manufacturing issues, specifically with two unnamed plants; and a lack of “sophistication in the way to go to market.”
U.S. sales for Stellantis, formerly Fiat Chrysler, have declined every year since a recent peak of 2.2 million in 2018. The company sold more than 1.5 million vehicles last year, a roughly 1% decline from 2022, when it reported a significant drop of 13% compared with the previous year.
Stellantis’ performance compares to the overall U.S. new light-duty vehicle sales market, which increased 13% last year, according to federal data.
Tavares has been on a profit-driven, cost-cutting mission since the company was formed through a merger between Fiat Chrysler and France’s PSA Groupe in January 2021.
He has prioritized profits and vehicle pricing over market share, leading to heavy criticism from the United Auto Workers union and Stellantis’ U.S. franchised dealers. More

Michael Jordan’s NASCAR team is suing NASCAR and CEO Jim France for what it said are anticompetitive practices and monopolistic control of the sport.
Jordan said the way NASCAR is run is unfair to teams, drivers and sponsors.
The suit also said teams are struggling to make reasonable profits.

Michael Jordan, NBA Hall of Famer and co-owner of 23XI Racing looks on during the NASCAR Cup Series FireKeepers Casino 400 at Michigan International Speedway on August 18, 2024 in Brooklyn, Michigan. 
Logan Riely | Getty Images

Michael Jordan’s NASCAR team, 23XI Racing, and fellow team Front Row Motorsports filed an antitrust lawsuit against NASCAR and CEO Jim France on Wednesday, arguing that they have used anticompetitive practices to prevent fair competition in the sport.
“Together, we brought this antitrust case so that racing can thrive and become a more competitive and fair sport in ways that will benefit teams, drivers, sponsors, and, most importantly, fans,” 23XI Racing and Front Row Motorsports said in a joint statement.

23XI Racing was founded in 2020 by NBA legend Jordan, driver Denny Hamlin and Jordan’s longtime business partner, Curtis Polk. Front Row Motorsports, meanwhile, is owned by Bob Jenkins and has been racing full time since 2005.
The suit alleges that NASCAR and France operate without transparency, have stifled competition, and control the sport in ways that unfairly benefits them at the expense of team owners, drivers, sponsors, partners and fans.
The two teams take issue with the fact that NASCAR does everything from buying the premier racetracks that are exclusive to its races to allegedly requiring teams to buy their parts from a single-source suppliers chosen by NASCAR. They also are prevented from participating in any other stock car races.

The hood of Tyler Reddick (#45 23XI Racing Upper Deck Toyota) on pit road prior to the running of the 75th Cook Out Southern 500 on September 01, 2024 at Darlington Raceway in Darlington, SC. 
Jeff Robinson | Icon Sportswire | Getty Images

The suit said teams are struggling to make reasonable profits, while investors must put tens of millions of dollars into the team.
Jenkins, of Front Row Motorsports, said he’s been in the business for 20 years and has yet to make a profit.

“We need a more competitive and fair system where teams, drivers and sponsors can be rewarded for our collective investment by building long-term enterprise value, just like every other successful professional sports league,” he said.
Meanwhile, the suit alleged, NASCAR is not facing the same financial issues. Last November, the company signed a new seven-year media deal with Fox, NBC, Amazon and Warner Bros. Discovery valued at $7.7 billion, a 40% increase over its previous deal.
Unlike most pro sports leagues, which are owned and operated by their teams and team owners, NASCAR is privately owned and operated by the France family.
“No other major professional sport in North America is run by a single family that enriches themselves through these kinds of unchecked monopolistic practices,” the suit said.
The financial challenges have led to high turnover among teams. Of the 19 team owners that were originally granted charters in 2016, only eight teams remain in the sport, according to the suit.
It can cost about $18 million per year to run one chartered team for a full season of Cup Series races, the suit said.
Even with four charters and 14 Cup Series championships, Jeff Gordon, Hendrick Motorsports vice chairman and a former NASCAR driver, said his race team has not had a profitable season in years, and he has “a lot of fears that sustainability is going to be a real challenge.”
Jordan, a longtime racing fan, is the first Black majority owner of a full-time racing team in the NASCAR series since legendary driver Wendell Scott.
“Today’s action shows I’m willing to fight for a competitive market where everyone wins,” Jordan said in a statement. “Everyone knows that I have always been a fierce competitor, and that will to win is what drives me and the entire 23XI team each and every week out on the track. I love the sport of racing and the passion of our fans, but the way NASCAR is run today is unfair to teams, drivers, sponsors, and fans.”

2024 Regular Season Champion, Tyler Reddick, driver of the #45 Upper Deck Toyota, poses with Curtis Polk, 23XI Racing co-owners, NBA Hall of Famer, Michael Jordan, and Denny Hamlin, driver of the #11 Sport Clips Haircuts Toyota, after the NASCAR Cup Series Cook Out Southern 500 at Darlington Raceway on September 01, 2024 in Darlington, South Carolina. 
Meg Oliphant | Getty Images

Jordan’s team, led by driver Tyler Reddick, won its first regular-season championship last month, in its fourth year of existence. He currently sits in ninth place in NASCAR’s standings.
23XI Racing and Front Row Motorsports said they will seek discovery from both NASCAR and France, and will seek damages for the anticompetitive terms they said they have been subject to under the 2016 charter agreement.
The teams are being represented by one of the most prominent sports lawyers in the country, Jeffrey Kessler, co-executive chairman of Winston & Strawn.
Kessler said they will file a preliminary injunction to enable the teams to race in the next calendar year while continuing to pursue antitrust litigation.
NASCAR did not immediately respond to a request for comment on the suit.
Disclosure: NBC and CNBC are owned by Comcast’s NBCUniversal unit.

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Eli Lilly will invest $4.5 billion to construct the Lilly Medicine Foundry, a center aimed at finding better ways to make medicines.
The investment seeks to build upon Lilly’s success from Mounjaro and Zepbound, which are riding a wave of popularity in so-called GLP-1 drugs.
Lilly has 11 obesity drugs in its pipeline and wants to develop more treatments for Alzheimer’s disease, ALS and other brain diseases, Chief Executive Officer David Ricks told CNBC.

Eli Lilly will spend $4.5 billion to build a center aimed at finding better ways to manufacture its medicines. 
The facility, called the Lilly Medicine Foundry, will house development of new manufacturing methods with an eye toward efficiency. It’s a strategy that’s already paying off with Lilly’s obesity and weight loss drugs Mounjaro and Zepbound, and Lilly wants it to propel the rest of its pipeline.

The foundry serves a dual purpose: researching new manufacturing procedures, then putting them into practice with production of drugs for clinical trials. Lilly says the facility will be the first of its kind to combine research and production in a single location. 
“The idea is to take molecules from a bench in a lab to scaled for medicines in a pharmacy, and this research and development site will do that work,” Eli Lilly Chief Executive Officer David Ricks said in an interview from the company’s headquarters in Indianapolis. 
The center, which is slated to open in late 2027, will be equipped to make small molecules, biologics and genetic medicines. It will be near a $9 billion manufacturing complex Lilly is building in Lebanon, Indiana, to produce pharmaceutical ingredients like tirzepatide, the active ingredient in Mounjaro and Zepbound.
The cranes and steel frames of the active construction site stick out amid the flat farmland, about a 40-minute drive from Lilly’s Indianapolis headquarters. 
The investments are part of Lilly’s plan to build upon its success with Mounjaro and Zepbound, which are riding a wave of popularity in so-called GLP-1 drugs with Novo Nordisk’s Ozempic and Wegovy.

Mounjaro and Zepbound are expected to bring in $50 billion alone by 2028 – almost twice the company’s entire full-year revenue in 2022. That gives Lilly more freedom to invest, but it also puts pressure on the company to find and develop more new medicines to keep growing in the years to come. 
Lilly is already charting its future beyond tirzepatide. The company also wants to develop more drugs for Alzheimer’s disease and other neurodegenerative conditions like amyotrophic lateral sclerosis, or ALS.
“There are all of these huge opportunities to improve human health that are hiding in plain sight,” said Dr. Dan Skovronsky, Lilly’s chief scientific officer. “In our industry, people usually like to see what’s popular and then follow the leader. So a lot of the other companies are now stopping their different research projects so they can try and figure out how to catch up to us in obesity and Alzheimer’s disease. OK, we’re working on the next thing. Sorry.” 

A sign with the company logo sits outside of the headquarters of Eli Lilly in Indianapolis, Indiana, on March 17, 2024.
Scott Olson | Getty Images

Lilly wants to look for “breakthrough ideas” in areas where the company already has a foothold such as oncology and immunology, as well as newer areas like cardiovascular disease, chronic pain and hearing loss, Skovronsky said.
Neuroscience is one area where he and Ricks want to put particular focus. Lilly has a long history in the space between its antidepressant Prozac and its newly approved Alzheimer’s drug Kisunla, but they see more work to do. 
“Neuropsych is a huge unmet need,” Ricks said. “Addiction and mental health, but also neurodegenerative conditions, so we’re investing heavily there. And perhaps the gains we’ve made in obesity can help fund the research in new areas.”
That’s not to say Lilly is done with obesity.

More CNBC health coverage

Ricks acknowledged that one drug won’t meet all needs and that Lilly needs to keep moving the science forward. The company has 11 obesity drugs in its pipeline with different mechanisms of action and modes of delivery, he said. That includes two closely watched drugs in Phase 3 trials: an experimental pill called orforglipron and another injectable medicine called retatrutide. 
Lilly is investing everywhere it thinks makes sense in obesity, Ricks said, but he recognizes other companies might explore new mechanisms that it’s possible Lilly hasn’t. He wants to see more pills, especially ones that can go after multiple targets. He’s also interested in technologies that mean giving injections less frequently, such as short interfering RNA. 
Any new advances could help Lilly become the first trillion-dollar health-care company. The company’s stock has soared nearly 65% over the past year, giving Lilly a market capitalization of about $840 billion.
Ricks downplays the importance of hitting the trillion-dollar mark, saying it would be an outcome, not a goal, for Lilly. 
“We want to do valuable things, and if we’re successful, we create value,” Ricks said. “That’s how we’ll get to a bigger number.” 

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Nike withdrew is full-year guidance and said it was postponing its investor day, which had been scheduled for November.
Nike beat earnings expectations by 18 cents, but it fell short on revenue as it works to fix its product assortment and rework its approach to innovation.
The sneaker giant is gearing up for a new CEO to take the helm.

An employee carries shoe boxes at the Footlocker retail store in the Barton Creek Square Mall on August 28, 2024 in Austin, Texas. 
Brandon Bell | Getty Images

Nike on Tuesday said it was withdrawing its full-year guidance and postponing its investor day as it gears up for a new CEO to take the helm.
Last month, the company announced that CEO John Donahoe would be stepping down in October and replaced with longtime company veteran Elliott Hill, effective Oct. 14. Given the impending CEO change, the company has decided to withdraw its full-year guidance and intends to provide quarterly guidance for the balance of the year, executives said.

“This provides Elliot with the flexibility to reconnect with our employees and teams, evaluate the current strategies and business trends and develop our plans to best position the business for fiscal ’26 and beyond,” finance chief Matthew Friend said on an earnings call with analysts.
When reporting fiscal fourth-quarter results in June, Nike cut its guidance for fiscal 2025 and said it was expecting sales to be down mid-single digits after it previously expected them to grow. Friend said since the fiscal year started, the company’s “revenue expectations have moderated… given traffic trends on Nike Digital, retail sales trends across the marketplace and final order books for spring.”
“We continue to see indications of slight second-half improvement in revenue trends versus our first half,” said Friend. “As we plan to introduce and scale newness and innovation across the marketplace, we now expect gross margins to decline versus the prior year.”
Nike said it expects revenue in its current quarter to be down between 8% and 10% and gross margin to be down about 1.5 percentage points. That’s worse than the 6.9% drop in revenue that LSEG analysts had expected.
It’s also postponing its investor day, originally scheduled for November. It’s unclear when the meeting will be rescheduled. 

Shares fell about 5% in extended trading after the updates and after Nike delivered mixed results for its fiscal first quarter.
Here’s how the world’s largest sneaker retailer performed compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Earnings per share: 70 cents vs 52 cents
Revenue: $11.59 billion vs $11.65 billion

The company’s reported net income for the three-month period that ended August 31 was $1.05 billion, or 70 cents per share, compared with $1.45 billion, or 94 cents per share, a year earlier.
Nike beat earnings expectations by 18 cents, but it fell short on revenue as it works to fix its product assortment and rework its approach to innovation.
Sales dropped to $11.59 billion, down about 10% from $12.94 billion a year earlier.
Nike’s gross margin grew by 1.2 percentage points in the quarter to 45.4%, higher than the 44.4% that StreetAccount analysts had expected. Still, profits fell by nearly 28% during the quarter.

Innovation

Over the last year, Nike has been accused of falling behind on innovation and ceding share to competitors as it focused on selling directly to consumers through its own websites and stores rather than through wholesalers such as Foot Locker and DSW. 
At first, the strategy was a boon to Nike’s profits and sales during the Covid pandemic, but as it scaled, it got more complex and consumers started returning to stores and other in-person activities.
During the quarter, Nike Direct sales were down 13% to $4.7 billion, while Nike digital sales were down 15%.
Critics say Nike’s focus on direct selling also led it to take its eye off innovation.
Under Donahoe’s leadership, the company grew annual sales by more than 31%, but it got there by churning out legacy franchises such as Air Force 1s, Dunks and Air Jordan 1s — not the groundbreaking styles that turned the company into a global powerhouse. 
Sales for those legacy franchises are no longer boosting sales in the same way they had previously, and as a result, the company has worked to cut off supply to drive up demand and recapture their cool factor.
During the first quarter, sales for those franchises declined more than the overall business. Online sales for Air Force 1s, Dunks and Air Jordan 1s combined were down nearly 50%. Jordan brand alone was down double-digits during the quarter, and the company expects it to be down at the same rate for fiscal 2025.
The company also expects overall online sales to be down double-digits in fiscal 2025.

Wholesale

Last year, Donahoe started to acknowledge Nike needed to mend its relationships with wholesalers, but the company’s board decided that Hill, who spent 32 years with Nike before retiring in 2020, would be the right person to lead its next chapter. 
Hill is known to be well-regarded among Nike’s retail partners, when he takes over later this month, he’ll have work to do to rebuild those relationships.
Wholesalers have previously spoken out about Nike’s product lineup and how the same old recycled franchises weren’t doing enough to drive sales. They’ve also been working to keep their own inventories in line and have been careful about ordering too much product.
Nike’s fiscal first-quarter wholesale revenue was down 8% to $6.4 billion.
“The multi-brand environment is very competitive today, and it will take time to expand market share. This was reflected in our spring ’25 order books, which came in roughly flat versus the prior year,” Friend said on the earnings call, adding orders were a “little lighter” than expected.
Compounding the issue is the overall sneaker market, which has been relatively stagnant in the U.S., and a slowdown in consumer spending on discretionary goods such as new clothes and shoes.

Footwear sales in the U.S. are projected to grow by just 2% in 2024 compared with 2023 after barely budging between 2022 and 2023, according to Euromonitor. Athletic footwear is expected to grow by about 5.6%, the firm said. 
During the most recent quarter, Nike footwear sales in North America were down 14%, and apparel sales fell 10%.
Converse, which Nike acquired in 2003, is also weighing down the company’s overall performance. Sales fell 15% to $501 million during the quarter but performed better than the $493 million that analysts had expected, according to StreetAccount.

China

Nike’s performance has also been weighed down by the uneven economy in China, Nike’s third-largest market by revenue. Nike’s performance in China is often an indicator of the region’s financial health, and in late June, it warned of a “softer outlook” in the region.
During its fiscal first quarter, Nike posted $1.67 billion in revenue in the region, slightly above the $1.62 billion that analysts had expected, according to StreetAccount. Still, traffic was “soft” in the region and Friend said that Nike is “not immune” to China’s challenging consumer environment.
China’s central bank recently unveiled its largest stimulus measures since the Covid pandemic, which is expected to give the region’s economy a much-needed boost. 
Nike’s fiscal first quarter concluded prior to those stimulus measures, but executives may share color on how sales are performing during the current period. 
Shares of Nike closed at $89.13 on Tuesday, down about 18% so far in 2024, significantly underperforming the S&P 500’s gains of about 20%. More