The shares of the sports clothing and equipment giant Nike More than one million people collapsed on Friday 19 % after disappointing with its annual results. It is true that they reflect a 12.4% increase in profits compared to the previous year, but they also anticipated a 10% drop in revenues in the first fiscal quarter of the new year – which began in June.
During the conference with analysts after the publication of the accounts, the president and CEO of Nike, John Donahoewarned that increased macroeconomic uncertainty and a worsening exchange rate have resulted in a deterioration in forecasts for the current fiscal year, which “will be a transitional year.”
Overall, it’s been a rough patch for sportswear and sneaker companies, but Nike Added to this is a drop in demand, both physically and online. Specifically, searches for its products fell by around 10% last month, according to a study by Goldman Sachs.
This news undermined the confidence of analysts Wall Streetwho came to question whether the company’s best days were behind it. “Nike has become overexposed to mid-level fashion trends, which are being disrupted by premium brands like Hoka, On, Lululemon and other startups that attract consumers,” he explained John Kernanmanaging director of TD Cowen, in a statement to its clients.
During this year Nike Nike has implemented a strategy change and a cost-saving plan. With this, they intended to make a 180-degree turn from the previous reorganization and focus on digital and direct-to-consumer sales. Now, Nike’s CFO, Matthew Friendhas assured that “the company has set out to recover market share and expand its market niche.”
