All Posts in "George"

Tesla owners are trading in their EVs at record levels, Edmunds says

As Elon Musk wraps up his second month in the White House, Tesla owners are trading in their electric vehicles at record levels, according to an analysis by national car shopping site Edmunds. The data from Edmunds published on Thursday said that March represented “the highest ever share” it had seen for Tesla trade-ins toward new or used cars from dealerships selling other brands. Since heading to Washington, D.C., in January as a central figure in the second Trump administration, Musk, who is CEO of Tesla, has been slashing the federal workforce and government spending, and has gained access to sensitive government computer systems and data, though his efforts have been repeatedly challenged in court. Before assuming leadership of the so-called Department of Government Efficiency, or DOGE, Musk spent around $290 million last year to help propel President Donald Trump back to the White House. While investors snapped up Tesla shares after Trump’s victory in November, they’ve been rushing for the exits of late, pushing the stock’s price down by 42% this year. Waves of protests have targeted Tesla facilities in the U.S. and beyond. Other criminal acts of vandalism and arson have targeted Tesla stores, vehicles and charging stations across the U.S. In addition, Tesla is facing increased competition from EV makers. In January, S&P Global Mobility found Tesla sales declined about 11% year over year in the U.S., while Ford, Chevrolet and Volkswagen bolstered their sales of EVs, picking up market share. “Shifts in Tesla consumer sentiment could create an opportunity for legacy automakers and EV startups to gain ground,” Jessica Caldwell, head of insights at Edmunds, wrote in an email. “As Tesla brand loyalty and interest wavers, those offering competitive pricing, new technology, or simply less controversy could capture defecting Tesla owners and first-time EV buyers.” The Tesla brand, more than that of any other automaker, is tightly tied to its CEO. In August 2024, Edmunds surveys found that just 2% of car shoppers in the U.S. were unfamiliar with Musk. Edmunds also said that shopping for new models of Tesla vehicles on its platform dropped to its lowest level last month since October 2022 after peaking as late as November. Even before Musk began heading up DOGE, Tesla’s brand was suffering. Its brand value fell by 26%, or about $15 billion, in 2024, a second straight annual decline, according to research and consulting firm Brand Finance. Many car shoppers trade in their Tesla EVs for a newer model Tesla. Edmunds data didn’t account for those transactions. Tesla didn’t immediately respond to a request for comment.
George by — March 22, 2025 By George in Business News
Dave Ramsey reacts with dismay at ‘buy now, pay later’ deal for DoorDash

Financial guru Dave Ramsey has joined the chorus of people appalled by a partnership between food delivery service DoorDash and e-commerce company Klarna, whose “buy now, pay later” payment system will allow customers to pay off their orders through split charges over time. Ramsey, a conservative radio pundit and personal finance expert who focuses on encouraging people to live a debt-free life, posted without comment an exasperated GIF of himself on the social platform X. In the snippet, which is taken from Ramsey’s popular show, the money wiz shakes his head and buries it in his hands. He linked it to a post touting the DoorDash-Klarna partnership on Thursday as offering customers an opportunity to “choose to pay for food deliveries in interest-free installments or deferred options aligned with payday schedules.” A spokesperson for Ramsey didn’t immediately respond to The Hill’s request for comment. The deferred payment plan, which will roll out fully in the coming weeks, was touted by both companies as providing an alternative for people struggling to afford everyday necessities. “Our partnership with DoorDash marks an important milestone in Klarna’s expansion into everyday spending categories,” Klarna spokesperson David Sykes said in announcing the arrangement on the company’s website. But many voiced concerns online about the financial impact on customers upon announcement of the partnership. DoorDash and Klarna didn’t immediately respond to The Hill’s requests for comment. The new arrangement comes as financial experts have warned of a possible recession and market turbulence amid uncertainty over the Trump administration’s tariff war with Canada and other countries. Ramsey, himself, had already warned about the impact tariffs would have on Americans. “You will pay more, no question about it, 100 percent,” Ramsey said during a recent episode of his radio show. “Companies do not eat taxes.”
George by — March 22, 2025 By George in Business News
Social Security Payments up to $5,108 to go out in final week of March

As March 2025 draws to a close, the Social Security Administration (SSA) is preparing to issue its final round of payments for the month. Retirees, survivors, and disability beneficiaries who have not yet received their March Social Security payments should expect their funds this week.

For some eligible recipients, the payment could be as high as $5,108, depending on factors such as retirement age and lifetime earnings. With the rising cost of living, these payments remain a crucial financial lifeline for millions of Americans.

Here’s what beneficiaries need to know about who is getting paid this week, how Social Security payments are structured, and what changes are coming next for recipients.

Who Will Receive a Social Security Payment in the Final Week of March?

Social Security benefits are distributed on a staggered payment schedule based on the recipient’s birth date and when they first started receiving benefits.

The final Social Security payment for March will be sent on Wednesday, March 26.

This last batch of payments for the month is for retirees, survivors, and disability beneficiaries who:

  • Began receiving benefits after May 1997
  • Have a birth date between the 21st and 31st of any month

If your birthday falls within this range, and you qualify for Social Security retirement, survivor, or disability benefits, expect your March payment to be deposited on March 26.

Beneficiaries who receive Supplemental Security Income (SSI) or who started receiving Social Security before May 1997 have already received their payments earlier in the month.

How Much Will Beneficiaries Receive?

The amount you receive in Social Security benefits depends on several factors, including:

  • Your earnings history
  • The age you started claiming benefits
  • Annual Cost-of-Living Adjustments (COLA)

For 2025, the maximum possible Social Security payment based on the highest earnings and delayed retirement age is:

  • $5,108 per month for those who retire at age 70
  • $4,018 per month for those who retire at full retirement age (67)
  • $2,831 per month for those who retire at 62

For the average retiree, however, the typical Social Security payment is much lower. In January 2025, the SSA reported that the average retirement benefit was $1,976 per month.

Additionally, disability benefits (SSDI) and survivor benefits vary based on individual earnings records and eligibility.

What to Do If You Haven’t Received Your Payment?

If you expect to receive a Social Security payment but have not yet seen it in your account, here’s what you should do:

  • Wait at least three business days – Payments sometimes take additional time to process, especially with bank holidays or delays in processing direct deposits.
  • Check your payment status online – Log into your mySocialSecurity account at SSA.gov/myaccount to confirm your payment details.
  • Contact your bank – If you receive payments via direct deposit, check with your bank to ensure there are no issues with account verification or transfers.
  • Call the SSA if needed – If your payment has not arrived after three business days, contact SSA customer service at 1-800-772-1213 to report the issue.

What’s Coming Next Month for Social Security Recipients?

With April 2025 on the horizon, Social Security recipients should be aware of several important developments that may impact future payments.

1. Social Security Payments Are Increasing in April

Beneficiaries will see higher payments starting in April, thanks to the Social Security Fairness Act (SSFA), which repealed the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO).

Over 3.2 million retirees, including teachers, firefighters, and public sector workers, will see an increase in their Social Security payments.

The SSA has already issued over $7.5 billion in retroactive payments, and monthly benefit adjustments will begin in April.

For affected retirees, April’s Social Security payment could be the highest they’ve ever received.

2. Possible Delays Due to SSA Staffing Cuts

The SSA is currently undergoing significant workforce reductions, eliminating 7,000 jobs and closing several regional offices.

These cuts could lead to longer wait times for customer service and delays in processing claims and benefit adjustments.

Beneficiaries who need to update their records or appeal benefit decisions should act quickly to avoid processing delays.

3. Smaller Cost-of-Living Adjustment (COLA) Expected for 2026

Although Social Security benefits increased by 2.5% in 2025, early projections indicate that the 2026 COLA may be just 2.2%—one of the smallest increases in recent years.

The COLA is based on inflation data, and while overall inflation has slowed, housing and medical care costs for retirees remain high. If the COLA is too small, retirees may find it harder to keep up with rising expenses.

The official COLA for 2026 will be announced in October 2025, based on third-quarter inflation data.

Takeaways: What to Know About Next Week’s Social Security Payment

✔ The last Social Security payment for March will be deposited on March 26 for retirees and disability beneficiaries born between the 21st and 31st of the month.

✔ Some beneficiaries could receive up to $5,108, depending on their earnings history and retirement age.

✔ If you haven’t received your payment by March 29, contact the SSA to investigate any issues.

✔ April 2025 will bring increased payments for many public-sector retirees due to the Social Security Fairness Act (SSFA).

✔ SSA staffing cuts may cause future processing delays, making it essential to stay proactive about benefit updates.

As Social Security payments continue to evolve, staying informed will help retirees and disability beneficiaries maximize their benefits and plan for the future.

George by — March 21, 2025 By George in World News
Apple Shuffles AI Executive Ranks in Bid to Turn Around Siri

Apple Inc. is undergoing a rare shake-up of its executive ranks, aiming to get its artificial intelligence efforts back on track after months of delays and stumbles, according to people familiar with the situation. Chief Executive Officer Tim Cook has lost confidence in the ability of AI head John Giannandrea to execute on product development, so he’s moving over another top executive to help: Vision Pro creator Mike Rockwell. In a new role, Rockwell will be in charge of the Siri virtual assistant, according to the people, who asked not to be identified because the moves haven’t been announced. Rockwell will report to software chief Craig Federighi, removing Siri completely from Giannandrea’s command. Apple announced the changes to employees on Thursday following Bloomberg News’ initial report. The iPhone maker’s senior leaders — a group known as the Top 100 — just met at a secretive, annual offsite gathering to discuss the future of the company. Its AI efforts were a key talking point at the summit, Bloomberg has reported. The moves underscore the plight facing Apple: Its AI technology is severely lagging industry rivals, and the company has shown little sign of catching up. The Apple Intelligence platform was late to arrive and largely a flop, despite being the main selling point for the iPhone 16. Rockwell is currently the vice president in charge of the Vision Products Group, or VPG, the division that developed Apple’s headset. As part of the changes, he’ll be leaving that team, though the Vision Pro software groups will follow him to Federighi’s software engineering group. The hardware team will remain under John Ternus and report to Paul Meade, a hardware engineering executive who worked on the Vision Pro. A spokeswoman for Cupertino, California-based Apple declined to comment on the moves. The need to rescue Siri is especially urgent. The company has struggled to release new features that were announced last June, including the ability to tap into a user’s data to fulfill queries. Despite the technology not being ready, Apple advertised the enhancements for months on TV in order to sell the iPhone 16. Following development snags, the company further delayed the features earlier this month. The Apple manager who has led Siri until now told his team in a recent meeting that the delays were “ugly” and that staffers may be angry and embarrassed. The executive, Robby Walker, also said he was unsure when the features would actually arrive due to competing development priorities. Apple has publicly stated that the features will be ready sometime in the “coming year.” Apple shares have declined 15% this year, part of a broader retreat for tech stocks. They fell less than 1% to $214.10 on Thursday in New York. By tapping Rockwell, Apple is betting on an executive with proven technical experience. He has demonstrated the ability to ship new products and run an engineering organization with thousands of people. Rockwell has a knack for solving problems and often takes the role of evangelist for futuristic technologies. Rockwell is known as the brains behind the Vision Pro, which is considered a technical marvel but not a commercial hit. Getting the headset to market required a number of technical breakthroughs, some of which leveraged forms of artificial intelligence. He is now moving away from the Vision Pro at a time when that unit is struggling to plot a future for the product. Over the last decade, Rockwell has been one of the few Apple executives to take a major hardware device from “zero to one” — industry parlance for conceiving a new product and bringing it to market. He joined Apple’s hardware engineering group in 2015, and the company released the Vision Pro in February of last year. Giannandrea has a different background. A former Google star, he was hired in 2018 to run Apple’s AI work. Giannandrea had been one of Alphabet Inc.’s most senior executives, overseeing the search and AI divisions. Rockwell, in contrast, doesn’t have prior experience as an AI leader or clout within the burgeoning machine-learning community. Apple has set the stage for the change by increasingly referring internally to the Vision Pro and VPG initiatives as “AI products.” Rockwell’s experience with hardware also could help the company more deeply embed AI into its future devices. Already, the company is exploring the idea of AirPods with outward-facing cameras that could feed data to AI. Siri — the AI division’s main consumer product — has had a number of bosses over the years. When Apple first launched the voice assistant in 2011, it was overseen by software executive Scott Forstall. It was then given to services chief Eddy Cue in 2012 and transferred to the current software head, Federighi, in 2017. Giannandrea took it over a year later. Now it will be led by Rockwell, with oversight returning again to Federighi. Giannandrea will remain at the company, even with Rockwell taking over Siri. An abrupt departure would signal publicly that the AI efforts have been tumultuous — something Apple is reluctant to acknowledge. Giannandrea’s other responsibilities include oversight of research, testing and technologies related to AI. The company also has a team reporting to Giannandrea investigating robotics. Federighi, Rockwell’s new manager, is the company’s senior vice president of software engineering. He oversees development of Apple’s iOS, iPadOS and macOS operating systems, as well as development tools. Along with Giannandrea, he was a key figure in the development of Apple Intelligence. Right now, he’s also orchestrating an extensive revamp of the company’s core software. Siri had been plagued by engineering and quality problems long before Giannandrea arrived on the scene. Though he struggled to turn around that technology, he’s made headway in other areas. That includes luring top AI researchers to Apple, which hadn’t been known for such work in the past. He also unified the company’s AI work under one roof, pulling in related technologies from across Apple into a single division. The AI management shift has been months in the making and predates Apple announcing the Siri delays. Last year, the company tapped Rockwell deputy Kim Vorrath to help advise the Siri team. She’s known for bringing order and execution to troubled development programs. In January, she was officially moved over to the AI group as a top lieutenant to Giannandrea to oversee AI program management. She is now moving to Federighi’s division. In the past several days, Apple started moving over another senior manager from Rockwell’s team — Aimee Nugent — to the Siri group. Like Vorrath, she has a reputation for fixing challenging projects. The changes allowed two of Rockwell’s trusted executives to evaluate the organization before he became heavily involved. Inside Apple, Rockwell hasn’t been shy about criticizing Siri, according to people familiar with the matter. For years, he has pitched senior vice presidents on ideas for overhauling the voice assistant to make it more personalized. He has also been advising the AI group in recent weeks. Even before the management changes, Giannandrea long considered Rockwell a potential successor. When developing the Vision Pro, Rockwell believed that Siri could be a central way to control the $3,499 device. Now, it’s only a limited element, with the company primarily focusing on hand-and-eye control. Rockwell has had more experience with the AI team in recent months as the company worked to bring Apple Intelligence to the Vision Pro. The features are launching on the headset in April as part of a visionOS software upgrade.
George by — March 21, 2025 By George in World News
NYSE-bound Klarna signs payments deal with DoorDash

Swedish payments firm Klarna, which is gearing up for a listing on the New York Stock Exchange, said on Thursday it has entered a payments partnership with online food and grocery delivery firm DoorDash (DASH.O), opens new tab.

Under the terms of the agreement, DoorDash customers could either pay in full, in four interest-free installments or defer payments until later.

The deal could add to Klarna’s momentum ahead of its initial public offering, and comes days after it said it was partnering with consumer finance app OnePay to offer installment loans for purchases at retail giant Walmart (WMT.N), opens new tab in the United States.

Earlier this month, Klarna disclosed a 24% surge in revenue for 2024 as it moves toward a long-awaited market debut that could be one of the most high-profile listings this year.

George by — March 21, 2025 By George in Equities
Alibaba Group Holding (NYSE:BABA) Jumps 69% As Q3 2025 Net Income Surges

Alibaba Group Holding announced plans to invest RMB 380 billion in cloud computing and AI, reinforcing its technological leadership. Recent financial results showcased robust growth, with net income for Q3 2025 jumping significantly year-over-year and sales continuing to rise. Despite a write-off of RMB 6,171 million, the impact was lighter compared to the previous year. Concurrently, their aggressive share buyback program repurchasing 119 million shares illustrates a steadfast focus on enhancing shareholder value, a possible driver for the price rise of 69% over the last quarter. During this period, while the broader market saw fluctuations with the S&P 500 and Nasdaq under pressure from tech giants and economic uncertainties, Alibaba’s positive developments appeared to offer resilience. Investors might view the company’s strategic initiatives and financial health as insulating factors, contributing to its standout performance amidst volatile market conditions.

Over the past year, Alibaba’s total shareholder return reached 105.03%, significantly outperforming the broader US market, which returned 10%. This robust performance can be attributed to several key factors. Alibaba’s announcement in February 2025 of a RMB 380 billion investment in cloud and AI infrastructure likely bolstered investor confidence by reinforcing its technological advancements. Additionally, the establishment of the Alibaba E-commerce Business Group in November 2024, integrating platforms like Taobao and Tmall, and the strategic joint venture with E-MART Inc. in January 2025, aimed at expanding global channels, further cemented its growth trajectory and market reach.

Moreover, Alibaba’s aggressive share buyback program throughout 2024 signaled its commitment to enhancing shareholder value, coinciding with strong financial results. Net income for Q3 2025 rose significantly compared to the previous year, contributing to investor optimism. Despite a RMB 6.17 billion goodwill impairment in late 2024, the decreased impact compared to prior periods buffered the downside, maintaining the company’s upward momentum in the market.

George by — March 21, 2025 By George in Equities
Stock market today: Dow, S&P 500, Nasdaq fall after Fed-fueled rally stalls

US stocks slipped on Thursday, failing to build on a Wednesday rally fueled by reassuring signals from Federal Reserve Chair Jerome Powell after the central bank held interest rates steady. The Nasdaq Composite (^IXIC) fell about 0.3%, while the S&P 500 (^GSPC) declined by 0.2% and the Dow Jones Industrial Average (^DJI) ended the session just below the flat line. All three major averages saw gains earlier in the trading day before ultimately losing steam. The Fed’s decision to keep interest rates unchanged on Wednesday was expected on Wall Street, but markets rallied, driven by a sense of relief that prior forecasts for two rate cuts this year held up. Doubts had been rising about the path to rate cuts amid concerns the US economy might buckle under President Trump’s broad plans for tariffs. In a press conference following the decision, Powell contributed to the good mood. The Fed chair reassured investors that inflation impacts from tariffs will likely be “transitory” and recession risks remain low. But Powell’s comments came after the Fed, in updated projections, revised upward its forecast for inflation at the end of this year while sharply lowering its forecast for economic growth. Those broader economic sentiments have been weighing on markets for much of the past two months, with both the benchmark S&P 500 and tech-heavy Nasdaq sliding into correction territory. For his part, Trump — who has largely refrained from weighing in on Fed policy thus far in a U-turn from his first term — looked set to amp up pressure on the central bank. “The Fed would be MUCH better off CUTTING RATES as U.S. Tariffs start to transition (ease!) their way into the economy,” he posted on social media late Wednesday.
George by — March 21, 2025 By George in Market Watch
Stock futures are little changed as S&P 500 aims to snap four-week losing streak: Live updates

U.S. stock futures traded near the flatline Thursday night after an attempt at extending Wednesday’s Federal Reserve-fueled rally failed. Futures tied to the S&P 500 were little changed. Dow Jones Industrial Average futures lost 19 points, or 0.04%. Nasdaq 100 futures slipped 0.02%. The action follows a losing session for the major averages. On Thursday, the S&P 500 slipped 0.2%, while the Nasdaq Composite dropped 0.3%. The 30-stock Dow lost 11.31 points, or 0.03%. On Wednesday, even as Fed policymakers kept their forecast for two rate cuts this year, they raised their inflation outlook and trimmed their economic growth expectations. The forecast raised the specter of stagflation – a scenario of rising inflation as the economy’s growth slows. Uncertainty around President Donald Trump’s tariff policies has rattled stocks in recent weeks, and Fed Chair Jerome Powell noted that tariffs may “delay” progress on inflation. Tariff worries are also weighing on companies, according to Michael Green, chief strategist at Simplify Asset Management. “Companies are increasingly citing confusion and uncertainty around their planning and capital spending and hiring decisions — and when they pause, it means that they’re slowing down,” he said. “There’s an element of that playing out in the markets.” It has been an ugly month, with the Nasdaq still sitting in correction – that is, more than 10% off its most recent peak – and the S&P 500 briefly touching correction territory last week. Nevertheless, the S&P 500 is on pace for a 0.4% advance week to date, and it’s about to break a four-week losing streak. The Dow is on track for a 1.1% gain, marking its best weekly performance since late January. The Nasdaq, however, is off about 0.4% in the period, heading for its fifth straight losing week and its longest stretch of weekly losses since May 2022.
George by — March 21, 2025 By George in Market Watch
U.S. dollar stands tall after Fed signals no rush to cut rates

TOKYO, March 21 (Reuters) – The U.S. dollar was on the front foot against major peers on Friday after its best single-day performance for three weeks with the Federal Reserve indicating no rush to cut interest rates. The risk-sensitive Australian and New Zealand dollars remained on the defensive after steep slides on Thursday as worries about the economic drag from U.S. President Donald Trump’s aggressive campaign of global trade tariffs dented sentiment. The dollar index measure against a basket of six counterparts was steady at 103.81 as of 0036 GMT, after climbing 0.36% on Thursday. The index plumped a five-month low at 103.19 this week following a steady decline from the highest since late 2022 at 110.17 on January 13 as hopes for expansive policies under Trump gave way to anxiety that the global trade war he started could trigger a U.S. recession. Fed policymakers held rates steady on Wednesday and signaled two quarter-point cuts for later this year, the same median forecast as three months ago. “We’re not going to be in any hurry to move,” Fed Chair Jerome Powell said, underscoring the challenge policymakers face in navigating Trump’s erratic tariffs, and the potential impact on the domestic economy. A new round of reciprocal levies is expected on April 2. “We see some signs of a potential turn in the USD … with price now pushing into the range highs of this recent consolidation phase,” said Chris Weston, head of research at Pepperstone “As we head into the April 2 Trump reciprocal tariff announcement, there is an increased risk that market players trim back on USD shorts and look to run a more neutral position.” The euro , which has by far the heaviest weighting in the dollar index, was little changed at $1.0854 after dropping 0.45% on Thursday. “It seems the market has lost some confidence to bid EUR/USD into 1.1000, and the spot rate seems to be carving out a 1.0950 to 1.0800 range,” Weston said. Sterling eased 0.06% to $1.2961. The dollar added 0.07% to 148.88 yen , and was steady against its Canadian counterpart at C$1.4321 . The Antipodean currencies, which are not part of the dollar index, suffered larger losses on Thursday. The New Zealand dollar tumbled more than 1%, but found its feet at $0.05766 in the latest session. The currency lost ground despite data on Thursday showing the economy crawled out of recession last quarter. The Aussie was relatively stable at $0.6303 following a 0.86% slump.
George by — March 21, 2025 By George in Business News
Nike expects sales will plunge in current quarter as it faces tariffs, sliding consumer confidence

Nike on Thursday warned that sales will drop by a double digit percentage in its current quarter as the sneaker giant contends with new tariffs, sliding consumer confidence and a slower than expected turnaround. In a conference call with analysts, finance chief Matt Friend said Nike expects its sales decline in the fiscal fourth quarter, which is set to end in May, to be at the “low end” of the “mid-teens range.” It also anticipates its gross margin will fall between 4 and 5 percentage points as it ramps up efforts to liquidate excess inventory and stale styles that are no longer resonating with consumers — a process it expects to continue into fiscal 2026. “We believe that the fourth quarter will reflect the largest impact from our … actions, and that the headwinds to revenue and gross margin will begin to moderate from there,” said Friend. “We are also navigating through several external factors that create uncertainty in the current operating environment, including geopolitical dynamics, new tariffs, volatile foreign exchange rates and tax regulations, as well as the impact of this uncertainty and other macro factors on consumer confidence.” The guidance is far worse than analysts had expected. Consensus estimates from LSEG show Wall Street had expected sales to be down 11.4% in the current quarter. Shares fell more than 4% in extended trading and are down more than 5% year to date, as of Thursday’s close. Beyond guidance, Nike beat Wall Street’s expectations in its fiscal third quarter. Here’s how the company performed during the quarter, compared with estimates from analysts polled by LSEG:
  • Earnings per share: 54 cents vs.29 cents estimated
  • Revenue: $11.27 billion vs. $11.01 billion estimated
The company’s reported net income for the three-month period that ended Feb. 28 was $794 million, or 54 cents per share, compared with $1.17 billion, or 77 cents per share, a year earlier. Sales dropped to $11.27 billion, down about 9% from $12.4 billion a year earlier. Like other retailers, Nike saw strong demand in December followed by “double digit” declines in January and February. While Nike delivered a strong earnings beat, expectations were low headed into the release and profits fell 32% from the year-ago period. During the quarter, Nike’s gross margin fell by 3.3 percentage points to 41.5%, lower than expectations of 41.8%, according to StreetAccount. That’s largely because of the costs associated with Nike’s efforts to clear out old inventory in favor of new, innovative styles. In a press release, the company attributed its drop in gross margin to “higher discounts, higher inventory obsolescence reserves, higher product costs and changes in channel mix.” Meanwhile, sales were down 9%, driven by weakness in China. During the quarter, sales fell 17% in the key region to $1.73 billion, falling short of expectations of $1.84 billion, according to StreetAccount. “I spent some time over there in December. I hadn’t been over there in a while. The competition is a bit more aggressive than what I remembered,” CEO Elliott Hill, who left Nike in 2020 and returned last year, told analysts. “So we’ve just got to accelerate our pace.” Thursday’s release comes about five months into Hill’s tenure as CEO and his efforts to turn around the business and get it back to growth. He has focused on winning back wholesale partners, reigniting innovation and wooing back athletes that have fled to new competitors, but the work has not yet yielded results. “I’ll start by saying I’m proud of the progress we made against the key actions we committed to 90 days ago. While we met the expectations we set, we’re not satisfied with our overall results,” Hill told analysts. “We can and will be better.” During the quarter, sales on Nike’s direct channels dropped 12% to $4.7 billion. Wholesale revenue fell 7% to $6.2 billion. Plus, since Hill took over, the company is now contending with a new set of dynamics that could make its comeback even harder to execute. In the three months since Nike last reported earnings, President Donald Trump has put a new 20% tariff on goods imported from China, consumer sentiment has fallen, and retail sales in both January and February were weaker than expected. Out of the hundreds of suppliers and manufacturers that Nike works with, about 24% of them are located in China, according to a manufacturing disclosure published in January. If the retailer doesn’t raise prices to offset tariffs and can’t push the cost entirely on to suppliers, Nike’s margins are expected to take a hit from the new duties. On Thursday’s call, Nike didn’t say whether it would raise prices or how exactly the new duties would affect margins. Further, when consumers aren’t feeling confident and cutting back on spending, discretionary products like new clothes and shoes are one of the first things they cut out in favor of necessities. Over the last few years, the overall sneaker and apparel markets have been slow because consumers have cut back on clothes and shoes. But up until recently, strong companies were still performing well and taking market share from weaker competitors. However, that trend began to shift over the last few weeks when even the strongest of companies started to sound the alarm about soft consumer spending when they reported first-quarter earnings, raising questions about the health of the economy. During the quarter, sales in North America — Nike’s largest market — fell 4% to $4.86 billion. Still, revenue in the region came in better than the $4.53 billion analysts had expected, according to StreetAccount. Nike is widely expected to reclaim the market share it lost and reset its business, and some insiders say the company’s problems have been overblown. Even so, the tariffs and economic fears could mean that the retailer’s turnaround could take longer, and be more difficult, than expected. What’s key to Nike’s turnaround plan is its ability to reignite innovation and create the type of industry-leading shoes and apparel that have long made it the market leader. During a call with analysts, Hill said early releases for the company’s new Pegasus Premium “nearly sold out” across North America and will scale through fall 2025. Its Romero 18, created for the everyday runner, has seen “outstanding” results, and Nike plans to double distribution by mid-April. “It will take time to reach the volume to replace the handful of classic franchises we over-indexed on, but our approach is simple,” said Hill. “Help consumers fall in love with something new from Nike, and that something is not replacing one icon for another.” Nike has already made strides in its efforts to grow its female consumer base, another key component to boosting revenue and apparel sales. Last month, it announced it was teaming up with Kim Kardashian’s intimates brand Skims to create a new product line dubbed NikeSKIMS that will include apparel, footwear and accessories. The buzzy partnership is expected to give Nike improved inroads with women and allow it to better compete with Lululemon, Alo Yoga and Vuori, which cater more to women than Nike currently does. Further, Nike debuted a new ad campaign geared toward female athletes during the Super Bowl, its first big game advertisement in decades. The campaign showed that reaching female athletes and capturing the buzz around women’s sports will be a center point of Hill’s strategy. If Nike can continue to show positive signs from new product launches and partnerships, the rest of its headwinds might just be drowned out as noise.
George by — March 21, 2025 By George in Business News
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