Nike had already warned of a weak start to the new financial year at the end of March. At that time, however, the company was still aiming for an increase in sales, at least for the year as a whole. On average, analysts had expected revenue to rise by at least two percent. The new forecast is now considerably worse than expected.
In the current first quarter of 2024/25, business will shrink by around ten percent, the company announced recently.
The global number one’s turnover had already stagnated in the past financial year 2023/24 at 51.4 billion dollars, falling slightly in the fourth quarter and thus disappointing expectations. 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.
But in the US market in particular, Nike is struggling with competition from new brands such as Hoka by Deckers or On. They accounted for 35% of the global market share in 2023 compared to the 20% held over the 2013-2020 period, based on an RBC research report, shares Reuters. Aiming to curb a worsening sales decline, Nike has cut back on oversupplied brands including Air Force 1, as part of a 2 billion dollar cost-cutting plan launched in late 2023.
