From Investing.com: 2024-06-28 06:36:19

Nike shares plummeted 15% in premarket trading as the company forecasted a mid-single-digit percentage drop in fiscal 2025 revenue, compared to analysts’ estimates of a 1% rise. This raised concerns about market share loss to upstart brands like On and Hoka, affecting rivals like JD Sports and Puma.

Morgan Stanley analysts downgraded Nike’s stock to “equal-weight” from “overweight,” citing uncertainty over long-term growth. Nike has been cutting back on oversupplied brands such as Air Force 1 as part of a $2 billion cost-cutting plan launched last year to combat declining sales.

Newer sporting goods brands like Hoka, Asics, and New Balance gained 35% of the global market share in 2023, up from 20% in 2013-2020. Nike’s U.S. sports footwear market share also decreased in 2023. At least six brokerages slashed their price targets on Nike due to the forecasted revenue drop.

Despite the challenges, BMO Capital Markets analysts believe Nike still has the potential to turn the business around with the right strategy. Nike’s shares were trading at 25.13 times profit estimates, while competitors like On and Deckers were trading at higher multiples, showing potential for growth.



Read more at Investing.com: Nike sinks as gloomy sales forecast fans growth concerns By Reuters