11:25 AM EDT, 09/23/2024 (MT Newswires) -- Nike's ( NKE ) fiscal Q1 is expected to show the lowest sales growth and "peak selling, general and administrative expenses deleverage" because of lifestyle direct-to-consumer exits and weaker international sales, BofA Securities said in an earnings preview Monday.

The announcement of Elliott Hill as the new chief executive will delay the analyst day and long-term strategy update for the company, while a gradual improvement narrative with milestones is recommended to ease investor concerns and maintain confidence in the stock, the firm said.

China remains a weak spot for the company with Q1 sales in Greater China expected to decline by 10% "based on continued signs of weakening," BofA noted.

The firm expects that Nike's ( NKE ) short-term margins will be supported by selling, general and administrative expenses flexibility, despite gross margin pressure from a shift to wholesale and slow-moving inventory.

BofA reiterated its buy rating on the company's stock and kept the price objective at $104.

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