Nike stock plunges as gloomy sales forecast fans growth concerns
Updates shares in paragraph 1 and 6, adds analyst comments in paragraphs 4, 7, 13
By Ananya Mariam Rajesh and Juveria Tabassum
June 28 (Reuters) -Nike's NKE.N stock slumped 20% 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.
It was the worst day ever for the stock, and the losses wiped out $28.41 billion from the company's market valuation.
The company on Thursday projected a mid-single-digit percentage fall in fiscal 2025 revenue, compared with analysts' estimates of a near 1% rise.
"Nike is at a point where they want to put out the most conservative guidance they can, such that they're setting the bar low for themselves and hopefully it's a bar they can beat," said Art Hogan, chief market strategist at B Riley Wealth.
Its forecast dragged shares of rivals and sportswear retailers across Europe, UK and the United States on Friday.
British sportswear retailer JD Sports JD.L lost 5.4% at Friday's close, while Germany's Puma PUMG.DE fell 1%. Adidas' ADSGn.DE shares were up marginally.
"Nike's been under pressure for a couple of years now. I certainly think they have an opportunity now that the valuation's been reset extremely low to start getting some sponsorship, but it's just not going to happen today or this week," Hogan added.
The company's U.S. market share in the sports footwear category fell to 34.97% in 2023 from 35.37% in 2022, and 35.40% in 2021, according to GlobalData.
Meanwhile, other sporting goods brands such as Hoka, Asics, New Balance and On accounted for 35% of the global market share in 2023 compared to the 20% held over the 2013-2020 period, according to an RBC research report released in June.
To curb a worsening sales decline, Nike has cut back on oversupplied brands including Air Force 1, as part of a $2 billion cost-cutting plan launched late last year.
The sportswear giant is also tweaking its product lineup to roll out new $100-and-under sneakers in countries around the world to appeal to price-conscious consumers.
It will also roll out this year an Air Max version and Pegasus 41 with full-length foam midsole made from ReactX to boost sustainability.
"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," said BMO Capital Markets analyst Simeon Siegel.
MANAGEMENT SHAKEOUT?
The underperformance over the past year has led to some Wall Street analysts raising the possibility of a management shake-up ahead of the company's investor day this fall.
"In retail, if you have two bad quarters, you're usually out the door," said Jessica Ramirez, senior analyst at Jane Hali & Associates.
"I think it (a leadership change) is very much needed."
CEO John Donahoe is in his fourth year of a five-year commitment as Nike's top boss. The former eBay CEO, who succeeded Mark Parker, was hired to focus on strengthening the company's digital channel sales.
"I have seen Nike's plans for the future and wholeheartedly believe in them. I am optimistic in Nike's future and John Donahoe has my unwavering confidence and full support," Phil Knight, co-founder and chairman emeritus, said in a statement.
At least six brokerages downgraded the stock and 15 cut their price targets.
Nike's performance so far in 2024 https://reut.rs/4chIv7l
Global sportswear market share of challenger brands vs legacy brands https://reut.rs/3xGba6X
Reporting by Ananya Mariam Rajesh, Juveria Tabassum, Reshma Rockie George in Bengaluru and Linda Pasquini and Samuel Indyk in London, editing by Alun John, Sriraj Kalluvila and Shinjini Ganguli
免責聲明: XM Group提供線上交易平台的登入和執行服務，允許個人查看和/或使用網站所提供的內容，但不進行任何更改或擴展其服務和訪問權限，並受以下條款與條例約束：（i）條款與條例；（ii）風險提示；（iii）完全免責聲明。網站內部所提供的所有資訊，僅限於一般資訊用途。請注意，我們所有的線上交易平台內容並不構成，也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。
所有缐上交易平台所發佈的資料，僅適用於教育/資訊類用途，不包含也不應被視爲適用於金融、投資稅或交易相關諮詢和建議，或是交易價格紀錄，或是任何金融商品或非應邀途徑的金融相關優惠的交易邀約或邀請。
本網站的所有XM和第三方所提供的内容，包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接，皆爲‘按原狀’，並作爲一般市場評論所提供，而非投資建議。請理解和接受，所有被歸類為投資研究範圍的相關内容，並非爲了促進投資研究獨立性，而根據法律要求所編寫，而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊，相關詳情請點擊 這裡查看。
