Nike said Thursday it has put a stop to falling sales in North America and forecast a return to growth by summer. The company issued quarterly results that delighted investors and sent Nike stock up nearly 6 percent in after-hours trading.
Significant uncertainty remains, though, as Nike copes with the fallout from unspecified conduct that prompted the exit of two top executives last week.
Chief executive Mark Parker addressed the crisis publicly for the first time Thursday, referencing "behavioral issues that are inconsistent with Nike's values of inclusivity, respect and empowerment."
"I'm committed to ensure that we have an environment where every Nike employee can have a positive experience and reach their full potential," Parker said at the beginning of Nike's quarterly earnings call with Wall Street analysts.
Additionally, Nike and other major importers could be upended by $50 billion in tariffs President Donald Trump imposed Thursday on China. Nike has warned the tariffs could temporarily disrupt its manufacturing. A trade war with China could bring additional turmoil in one of Nike's largest markets.
Nike was silent on trade matters Thursday, though. After his opening remarks, Parker focused narrowly on the company's quarterly results and an improved forecast, which the company attributed to its new sales strategy. Nike has promised more rapid product introduction and tighter connection with consumers.
After weathering disappointing results recently in North America, Parker said the company anticipates a "significant reversal" over the next two quarters. He said North American sales will be flat this quarter and resume growing after that.
"It's becoming increasingly clear that the closer we connect our strong brand to consumers in the marketplace, the greater the returns," Parker told analysts.
Nike reported $9.0 billion in revenue for its fiscal third quarter, up 6.5 percent from a year earlier. The company forecast growth near 10 percent in the current growth and similar growth in its next fiscal year.
One-time charges from the federal tax overhaul approved in December pushed Nike into the red for the quarter, posting a loss of $921 million, or 57 cents a share. Nominally, that's Nike's first quarterly loss in nearly 20 years.
Without a one-time, $1.25-a-share charge related to the tax changes, however, Nike said it beat its profit forecasts. The company said the federal tax overhaul will have a neutral or slightly positive effect on its profits beginning with its next fiscal year.
Nike shares fell nearly 3 percent Thursday, joining a broad market decline triggered by Trump's tariffs. The stock rebounded after-hours, though, after investors got a look at Nike's quarterly numbers, and shares jumped $3.83 to $68.25.
Oregon's largest company has been under a cloud since brand President Trevor Edwards abruptly announced his retirement last Thursday. He had been widely viewed as having an inside track to the CEO post but abruptly left his job last week.
Parker told employees the company had heard "reports of behavior occurring within our organization that do not reflect our core values of inclusivity, respect and empowerment," though Nike said there hadn't been direct accusations against Edwards.
A day after Edwards' exit, Nike acknowledged that a vice president named Jayme Martin had also left the company. Parker has committed to continue running the company through 2020 and said Thursday that Nike will continue working to "evolve" in search of a welcoming environment for all its employees.
"We have a deep leadership bench at Nike," Parker said, "and I'm confident that our restructured leadership team will continue to strengthen our culture."