Nike has withdrawn its annual revenue forecast as it struggles to prevent sales from sliding. It had earlier forecast an annual revenue decline in the mid-single digits. Now, incoming CEO Elliott Hill will have to quickly devise a turnaround strategy for the company.

The company’s Australian operations are reeling too. Nike’s Australian operations posted just under $922.7 million in sales for the 12 months to May 31, down from $941.7 million the year before. Profit after tax decreased from $14.6 million to $13.2 million.

Withdrawing the forecast “provides Elliott 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,” chief financial officer Matt Friend said on a call with analysts, according to Bloomberg.

Traffic declines across Nike-owned stores and websites were more pronounced than anticipated, leading to an inventory backlog, added Friend. He also said that sales declined despite higher promotions at stores owned by its wholesale and retail partners.

Sales in the fiscal first quarter fell 10 per cent to $11.59 billion (A$16.83 billion). Declines were sharp in North America as well as Europe, Africa and the Middle East. The company expects revenue to fall 8-10 per cent in the second quarter.

Hill, who once was an intern at Nike several decades ago and then spent 32 years at the company before retiring in 2020, has came out of retirement to take the reins from John Donahoe who became CEO in 2020.

Although Donahoe oversaw a period wherein Nike hit its $50 billion (A$72.6 billion) revenue goal, it had come at the cost of the company reducing or halting the flow of its sneakers to more than half of its retail partners, in favour of Nike’s own stores and digital platforms.

In December last year, Donahoe presented a plan to cut $2 billion (A$2.9 billion) in costs, including a 2 per cent reduction of Nike’s workforce, which it began to implement in phases in the first half of this year.

The 60-year-old sneaker brand has seen its share price decline more than 22 per cent since the start of this year.

“This is going to be one of those quarters where they’re probably going to try to dump all the bad news as much as they can now and get it over with and start new,” said Jay Woods, chief global strategist at investment banking firm Freedom Capital Markets, reported Reuters.

Woods said he expects investors to give Hill a “grace period” as he comes on board but added, “The question is, can he, with his experience and deep ties seeded in the iconic Nike brand … bring some magic back?”