Nike’s Sales are Tumbling
Nike is experiencing a downturn as global sales fell by 9% last quarter, with a sharp 17% decline in China, the company announced on Thursday. In North America, its biggest market, sales also dropped by 9%.
Despite the decline, the results were slightly better than expected, leading to a 4% increase in Nike’s stock during after-hours trading. However, the company’s shares have still lost around 30% of their value over the past year.
Nike is contending with shifting consumer preferences and heightened competition from emerging running shoe brands like Hoka and On. Shoppers are moving away from high-priced sneakers and athletic wear in favor of more affordable options.
In response, the company is adjusting its strategy by limiting the supply of classic sneaker lines such as the Air Force 1 and Pegasus to maintain demand and full-price sales. Nike is also emphasizing newer, higher-priced models like the Air Max and updated Pegasus designs.
Previously, Nike reduced the number of third-party retailers carrying its products, focusing instead on direct-to-consumer sales through its own platforms. However, this move negatively impacted sales, prompting the company to reestablish some retail partnerships.
Industry analyst Neil Saunders noted that Nike may have overestimated the ability to drive sales independently, stating that the company “underestimated the importance of third-party retailers.”
To regain momentum, Nike is relying on new leadership and high-profile collaborations. The brand has brought back former executive Elliott Hill as CEO and is launching NikeSkims, a partnership with Kim Kardashian’s Skims, in the U.S. this spring.
