Nike sinks over 18% as gloomy sales forecast fans growth concerns
shares slumped 18.6% in early trade on Friday as a forecast for a surprise drop in annual sales amplified 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 on Thursday projected a mid-single-digit percentage fall in fiscal 2025 revenue, compared to analysts' estimates of a near 1% rise, dragging shares of rivals and sportswear retailers across Europe, UK and U.S. on Friday.
British sportswear retailer JD Sports fell as much as 6.6% and Germany's Puma lost 3%, while Adidas edged lower after briefly rising nearly 2%.
If current losses hold, Nike's shares were set for their worst day in more than two decades and wipe out nearly $27 billion in market value.
«Nike shares are headed for a stay in the proverbial penalty box until new product innovations actually start to manifest themselves and management regains investor trust,» Wedbush analyst Tom Nikic said in a note.
To be sure, Nike has cut back on oversupplied brands including Air Force 1 to curb a worsening sales decline as part of a $2 billion cost-cutting plan launched late last year.
Nike is set to roll out this year an Air Max version and Pegasus 41 with full-length foam midsole made from ReactX to boost sustainability, responding to concerns over stagnating innovation.
Sporting goods brands, such as Hoka, Asics, New Balance and On, accounted for 35% of global market share in 2023 compared to the 20% held over the 2013-2020 period, according to a RBC research
