Nike closed the book Thursday on one of the most disappointing years for financial performance in the company’s storied history.

The sportswear giant reported sales grew just 1% for the fiscal year that ended May 31.

Take away the pandemic, the 2008 financial crisis, and the Asian financial crisis in the late 1990s, and Nike hasn’t reported growth that slow since the first term of Bill Clinton’s presidency.

Nike expects this year will be even worse for sales. Its forecast calls for a year-over-year decline.

On a call with stock analysts, CEO John Donahoe characterized it as “transition year” while the company brings new products to market.

“We continue to make real progress on our comeback,” Donahoe said, adding, “We have work to do, but we’re on it.”

Nike is Oregon’s biggest company and a Wall Street juggernaut, but the earnings report shows it remains in a slump.

Under Donahoe’s leadership, Nike leaned heavily into direct-to-consumer sales and retro sneakers, including its classic leather Dunks. Spurning retailers opened more shelf space for competitors at sporting goods stores. And the throwback styling, while reliably popular, left room for companies with fresh designs to draw customers’ attention.

While Nike has struggled, upstarts including Hoka and On have enjoyed booming sales, picking way at Nike’s historic core clientele of running enthusiasts.

As of Thursday’s close, Nike’s shares were down roughly 7% since Donahoe started work in January 2020, while the S&P 500, a broad basket of stocks, was up 68%.

On the earnings call, Chief Financial Officer Matt Friend said sales of retro sneakers slowed in the most recent quarter, which led to the reduced sales forecast.

“We were surprised at what we saw on these larger franchises,” Friend said. “That is what caused us to revise our guidance.”

The company’s stock was down 12% in after-hours trading less than an hour after the call.

Friend said Nike expects sales will decrease in the mid-single digits in the fiscal year that started June 1, including a 10% decrease in the current quarter. But he said Nike expects sales to improve around the holidays as more new products hit store shelves.

“We expect to exit the year with momentum,” Friend said.

Nike previously announced it was ramping up investment in developing new products. In December, Donahoe said the company was at the start of a “a multi-year product innovation cycle.” Donahoe and Friend noted strong early sales of the Pegasus 41 and Air Max DN, among other new sneakers.

“A comeback at this scale takes time,” Friend said.

In a press release Thursday, Donahoe said the company is meeting its “challenges head-on.”

In December, Nike announced a $2 billion cost-cutting plan and soon began laying off 2% of its workforce, including 740 Oregon employees.

On the earnings call, Donahoe added the “organizational reset” and the layoffs are now “behind us.”

“We’re now completely aligned around sport, fields of play, and our teams are focused, they’re excited and there’s a tremendous amount of hustle throughout the organization,” Donahoe said. “And you can feel it.”

Nike went public in 1980. Since then, it’s averaged 15% annual sales growth.

Before the layoffs, Nike employed 83,700, including 11,400 at its roughly 400-acre corporate headquarters campus near Beaverton, according to its last annual report.

– Matthew Kish covers business, including the sportswear and banking industries. Reach him at 503-221-4386, mkish@oregonian.com or @matthewkish.

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