Nike (NKE) is taking a step in the right direction under new CEO Elliott Hill.

The shoe brand reported its fiscal second-quarter results on Thursday after the market closed. Revenue of $12.35 billion beat expectations of $12.13 billion, although it was still down from $13.39 billion a year ago.

Adjusted earnings per share were $0.78, compared to estimates of $0.63, but also below last year’s figure of $1.03.

The earnings report is the first under Hill, who has been CEO for 60 days but spent his entire career at the company before retiring in 2020.

Hill opened the earnings call by sharing that he believes Nike has “lost” its “obsession with sports.”

“We will move forward with sport and put the athlete at the center of every decision,” he said.

His team plans to reinvest in the brand’s storytelling and “rebuild an integrated marketplace for NIKE Direct and wholesale.”

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Hill added: “It won’t be easy, but we’re up for the challenge.”

“The recovery will be a multi-year effort, but Hill appears to be taking Nike back to its core, back to Nike,” said John Nagle, chief investment officer at Kavar Capital Partners, which owns Nike shares.

On Friday, Telsey Advisory Group’s Cristina Fernández downgraded shares from “Outperform” to “Market Perform,” citing that the turnaround plan’s implementation “will take longer, require greater investment in areas such as brand marketing, and over the next 12 months.” will result in lower sales and profitability,” adding that there is an overall lack of “clarity” about how long it will take.

Nike shares fell about 4% in premarket trading on Friday on a cautious outlook as analysts expect near-term margin pressure.

Over the past year, Nike shares have fallen more than 36% as the footwear brand has lost focus on its products and relationships with distributors and now struggles with the rise of On Holding (ONON), Skechers (SKX) and Hoka ( DECK) Sneakers.

Here’s what Nike reported in its fiscal second quarter, compared to Bloomberg consensus estimates:

• Adjusted earnings per share: $0.78 compared to $0.63

• Revenue: $12.35 billion compared to $12.13 billion

• Nike brand sales: $11.95 billion compared to $11.64 billion

During the quarter, gross margin declined 100 basis points to 43.6%, primarily due to discounting and changes in channel mix. Product usage costs fell, as did storage and logistics costs.

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