Nike warns of falling sales as upstarts crowd its business, stock sees worst day on record
Add Axios as your preferred source to
see more of our stories on Google.
/2024/06/28/1719597670897.gif?w=3840)
Illustration: Aïda Amer/Axios
Nike's business is more of an oof than a swoosh at the moment.
Why it matters: Investors have been abandoning ship as Nike's strategies — both in innovation and distribution — have struggled to win budget-conscious consumers or beat back growing competition.
Driving the news: Nike expects its sales to drop about 10% in its current quarter and it cut its full-year guidance, per its earnings report released yesterday.
- Shares plummeted 20% today — its worst day on record — and are down 29% year-to-date.
Zoom in: "Our lifestyle business declined in Q4 across men's, women's and Jordan, more than offsetting strong growth in our sport performance business," CFO Matthew Friend told investors on Nike's earnings call.
The big picture: Young sports brands including the Roger Federer-backed On and Hoka, owned by Deckers, have gained market share in running shoes — a category that has boomed since COVID and Nike has missed addressing.
- Meanwhile, Nike has lost precious time and money in recent years on a direct-to-consumer distribution bet that backfired.
What we're watching: Some Wall Street analysts have been questioning whether the right leadership is in place.
- Nike co-founder and chairman emeritus Phil Knight rushed to defend CEO John Donahoe, who's been in charge for over four years, telling CNBC today that he believes in Nike's plans for the future "wholeheartedly."
