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Nike stock has worst day on record, wiping out $28 billion in value
Oregon Live ^ | 06/28/2024 | BRAKKTON BOOKER, JESSICA PIPER and ISABELLA RAMÍREZ

Posted on 06/30/2024 5:19:45 PM PDT by lasereye

Nike shares on Friday tumbled nearly 20% after the company said it expected sales to decline in its new fiscal year, the latest sign of severe turbulence at Oregon’s biggest company.

It was the biggest one-day drop in Nike history, wiping out roughly $28 billion in shareholder wealth.

Even before Friday’s tumble, Nike’s stock had been heading steadily downward after climbing above $170 in November 2021. Shares closed Friday at $75.36.

Under CEO John Donahoe, who started work in 2020, the sportswear giant bet heavily on direct sales and the popularity of Nike classics, like Air Jordans, Dunks and Air Force 1s. The move away from wholesale opened shelf space for competitors, including Hoka and On, who have gained momentum.

Thursday night, the company said demand for “lifestyle” sneakers, like Dunks, is slowing more than previously expected.

“We were surprised at what we saw on these larger franchises as we were navigating through the … quarter,” Chief Financial Officer Matt Friend said on a call with stock analysts.

Friend forecast a mid-single digit sales decrease in the Nike fiscal year that started June 1. Analysts previously expected sales would increase roughly 2%, according to Bloomberg.

“Last night was a big disappointment across the board,” said Brian Yarbrough, an Edward Jones consumer research analyst. “There weren’t a lot of positives in there.”

Before Friday, a one-day 19.5% price drop on Feb. 27, 2001, was the worst day for Nike’s shares. That day, the company said a new ordering system “wrecked its shoemaking schedule,” leaving Nike with “double the needed amount.”

On Thursday’s call, Donahoe and Friend used the word “comeback” five times between them as they worked to convince investors that Nike’s previously announced plans to invigorate its product pipeline will bear fruit around the holiday season.

The company’s also laid off 2% of its corporate workforce, part of a $2 billion cost-cutting plan.

Some analysts remained skeptical, especially after the sudden change in Nike’s sales forecast.

“Management credibility is severely challenged and potential for C-level regime change adds further uncertainty,” wrote Stifel Managing Director Jim Duffy in a note to investors.

Williams Trading analyst Sam Poser put it more bluntly.

“Nike is a mess and is deflated, as is any confidence we may have had,” he wrote, adding how recent layoffs and voluntary attrition have left the company short-handed at a moment of crisis.

Edward Jones’s Yarbrough was less pessimistic given Nike’s track record.

“If you go back in history, when Nike puts its full force behind innovation, usually the following several years are very good.”


TOPICS: Business/Economy; Government; News/Current Events; Politics/Elections; US: Oregon
KEYWORDS: chat; nike; notnews; stock
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To: lasereye

21 posted on 06/30/2024 6:16:10 PM PDT by Diana in Wisconsin (I don't have, 'Hobbies.' I'm developing a robust Post-Apocalyptic skill set. )
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To: lasereye

I can’t remember ever buying any Nike gear, but I bought the stock on Friday after the drop. I’ve seen this play out before... company announced poor earnings, and the market overcorrects. I could be wrong, but Nike is still a great brand, and I think i can make some quick $$.


22 posted on 06/30/2024 6:21:35 PM PDT by bigdaddy45
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To: bigdaddy45

It is a dog with fleas—pump and dump.

:-)


23 posted on 06/30/2024 6:22:48 PM PDT by cgbg ("Our democracy" = Their Kleptocracy)
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To: lasereye

Pushing America Last athletes Colin Kaepernick and Megan Rapinoe as faces of the company was a terrible decision.


24 posted on 06/30/2024 6:23:38 PM PDT by MTBobcat (The “rank-and-file” are as corrupted as their leadership.)
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To: lasereye

China tariffs coming up!


25 posted on 06/30/2024 6:25:09 PM PDT by Fido969
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To: Ciaphas Cain

I will never buy Nike after it hired Michael Vick and compounded the problem by having the mug of Colin Kapernick on that building.


26 posted on 06/30/2024 6:30:40 PM PDT by yldstrk ( )
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To: lasereye

I work for an AAA affiliate of MLB. I get offered free gifts from this company and ALWAYS reject them. I told the team that I do not endorse the Chinese Checkmark company.

I usually get mixed responses. Like - Why does someone not want free stuff?

I refuse to obey.


27 posted on 06/30/2024 6:38:46 PM PDT by Dacula
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To: Liaison

NB are now my only choice, though the last pair I had fell apart in a year.


28 posted on 06/30/2024 6:58:09 PM PDT by logi_cal869 (-cynicus the "concern troll" a/o 10/03/2018 /!i!! &@$%&*(@ -)
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To: lasereye

I don’t know why people want to spend so much money on a tennis shoe with a check mark on it.


29 posted on 06/30/2024 7:12:15 PM PDT by roving (Deplorable Erectionists Listless Vessel )
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To: lasereye
Nike may join Disney as another formerly great American company being run into the ground.

They chose poorly.
30 posted on 06/30/2024 7:13:41 PM PDT by af_vet_1981 ( The bus came by and I got on, That's when it all began)
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To: T.B. Yoits

I had forgotten about that. That and having a senile President are two of the weirdest things in the last 30 years.


31 posted on 06/30/2024 7:21:50 PM PDT by lasereye
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To: Liaison

If been using NB for years. Agree with you.


32 posted on 06/30/2024 7:40:25 PM PDT by Mouton (A 150MT hit may not solve our problems now but is a good start. )
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To: lasereye

Queer shoes just don’t sell well.


33 posted on 06/30/2024 7:44:11 PM PDT by RetiredTexasVet (We used to be a Republic, we are now a Fascist Klepto-Thugocracy.)
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To: Ciaphas Cain

For several decades I attempted to explain to my kids that buying brand name hype was just pasting a Sucker billboard on their backs.


34 posted on 06/30/2024 8:07:33 PM PDT by whistleduck
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To: lasereye

Couldn’t have happened to more deserving slave master, to bad that it took down shareholders too.


35 posted on 06/30/2024 8:10:25 PM PDT by Mastador1
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To: lasereye

I hope Nike just dies.


36 posted on 06/30/2024 8:11:06 PM PDT by Bullish (...And just like that, I was dropped from the ping-list)
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To: lasereye

If pressed, I will always buy alternative sports wear rather than Nike.


37 posted on 06/30/2024 8:22:25 PM PDT by KC_Conspirator
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To: lasereye
Remember this fraud? Mr. Human rights doing an ad for a company that uses Chinese slave labor


38 posted on 06/30/2024 8:23:36 PM PDT by GrandJediMasterYoda (As long as Hillary Clinton remains free, the USA will never have equal justice under the law)
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To: logi_cal869

Hokas are great and I haven’t had an issue with stitching failing before the treads wear out unlike nike.


39 posted on 06/30/2024 8:42:12 PM PDT by 31R1O (The people who can control themselves ought to be able to defend themselves from those who can't.)
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To: lasereye

I worked there for 15 years. I all by myself saved them 1 million on a Texas tax audit. They did not care....at all. And after that neither did I.


40 posted on 06/30/2024 8:51:36 PM PDT by Aria
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