Nike Dropping Fast

Nike just made history for the wrong reasons. Their stock plummeted following the forecast of a drop in sales, prompting the single worst day in their stock’s history. This entailed losses that wiped out $28.4 billion (20%) from their market valuation. 

This came as a surprise, as analysts had estimated a 1% percent rise in revenue for Nike. However, on Thursday, the company projected a fall in 2025 revenue of about 4-6%. Nike also dragged down others with them, as JD Sports (a British sportswear retailer) lost 5.4% at Friday’s close and Puma fell 1%.

Nike’s US market share has fallen from 35.4% in 2021 to, most recently, 34.9% in 2023. Meanwhile, other sporting goods brands, such as Hoka, Asics, New Balance and On, account for 35% of the global market now, compared to just 20% in 2020. So, long story short, the competition has been closing in on Nike. 

Nike launched a $2 billion cost-cutting plan late last year, which included a new product lineup set to feature new sneakers that cost under $100. Many have also wondered if a management shake up is possible in the near future too. 

BMO Capital Markets analyst Simeon Siegel said, “This is still Nike, and we expect their size and scale to prove a long-term competitive advantage, but the burden of proof [is] on management execution at this point.” When it comes to buying Nike sneakers, people aren’t “just do(ing) it” like they used to.