Nike stock plunges on surprise forecast of drop in sales
What are Nike's plans to address its sales decline?
Nike plans to address its sales decline by cutting back on oversupplied brands like Air Force 1, rolling out new $100-and-under sneakers globally, and launching an Air Max version and Pegasus 41 with a full-length foam midsole made from ReactX to boost sustainability. The company is also focusing on its direct-to-consumer sales and digital channel sales, as well as restructuring its product lineup and supply chain to reduce costs by about $2 billion over the next three years.
How did Nike's US sports footwear market share change in 2023?
In 2023, Nike's US sports footwear market share fell to 34.97% from 35.37% in 2022, and 35.4% in 2021, according to GlobalData. This decline comes amid growing competition from other sporting goods brands such as Hoka, Asics, New Balance, and On.
Why did Nike's stock plunge recently?
Nike's stock plunged due to a forecast of a surprise drop in annual sales, amplifying investor concerns about the pace of the sportswear giant's efforts to stem market share losses to upstart brands such as On and Hoka. The company projected a mid-single-digit percentage fall in fiscal 2025 revenue, compared to analysts' estimates of a near 1% rise.