Nike sales drop 12%, but sneaker giant says the worst of its slump is behind it

• Nike beat on the top and bottom lines in its fiscal fourth quarter.
• The sneaker giant said it took its biggest financial hit yet from its turnaround plan during the period, but expects sales and profit declines to moderate moving forward.

Nike on Thursday said it expects sales and profit declines to moderate ahead, after the sneaker giant took its biggest financial hit yet from its turnaround plan during its fiscal fourth quarter.

While Wall Street's expectations were low coming into the report, Nike beat estimates on the top and bottom lines.

Here's how the company did for the three-month period ended May 31, compared with estimates from analysts polled by LSEG:

• Earnings per share:14 cents per share vs. 13 cents estimated
• Revenue: $11.10 billion vs. $10.72 billion estimated

The company's reported net income for the quarter was $211 million, or 14 cents per share, compared with $1.5 billion, or 99 cents per share, a year earlier.

Sales dropped to $11.10 billion, down about 12% from $12.61 billion a year earlier.

Last quarter, Nike warned that its fiscal fourth quarter would be the low point of its turnaround but in the months since, conditions worsened, leaving investors wondering if more pain was still to come.

In a press release, Nike finance chief Matt Friend confirmed that the fiscal fourth quarter will see the “largest financial impact” from its turnaround and headwinds are expected to moderate moving forward.

“I am confident in our ability to navigate through this current dynamic and uncertain environment by focusing on what we can control,” said Friend.