Following an announcement by Nike that they anticipate a surprise 10% decrease in quarterly revenue due to increased competition from brands like On and Hoka, the company’s shares dropped more than 12% in after-hours trading. This could potentially result in a loss of $15bn in market value if the losses persist on Friday. Additionally, Nike noted a weakening demand in international markets, particularly in China. Despite these challenges, the company remains hopeful that new products and a marketing campaign at the upcoming Olympics in Paris will help to regain consumer interest.
During an earnings call, CEO John Donahoe expressed excitement about the marketing opportunities the Paris Olympics present for Nike. The company also adjusted its outlook for the 2025 fiscal year and acknowledged a decline in direct-to-consumer business, with some customers opting for newer, trendier brands instead. Neil Saunders, Managing director of GlobalData Retail, suggested that Nike’s lack of innovation, marketing, and storytelling around its products may be contributing to its sales struggles.
In an effort to revitalize sales, Nike’s decision to focus on selling products through its own stores and website rather than via wholesalers like Foot Locker was reported to have negatively impacted sales. Saunders emphasized the importance for Nike to re-engage consumers and persuade them to purchase its products. Despite these challenges, Nike remains a top sponsor of jerseys at the UEFA Euro 2024 football tournament. With sponsorships of nine national teams, including England, France, and Portugal, Nike continues to have a significant presence in the sports apparel market.