Nike (NKE) delivered positive results for the second fiscal quarter amid restructuring efforts led by new CEO Elliott Hill.

The company reported revenue of $12.35 billion, surpassing the forecasted $12.13 billion, but falling short of last year’s $13.39 billion. Adjusted earnings per share were $0.78, exceeding analyst expectations of $0.63 but below last year’s $1.03 for the same period.

Nike’s stock dropped 4% during premarket trading following cautious margin forecasts. Revenue from the Nike Brand declined by 7% to $11.95 billion across all geographic regions. Direct-to-consumer sales decreased by 13%, including a 21% drop in digital sales.

CFO Matthew Friend stated that Nike plans to reduce excess inventory and transition to full-price sales. Summer order books are expected to be lower than last year as the company aims to “clean and reset the market.”

Elliott Hill emphasized that Nike’s strategy will focus on supporting partners and strengthening the brand through marketing. Analysts predict the recovery process will take several years, with results of these efforts becoming evident by the end of the 2025 fiscal year.