Key points:

  • Nike shares fell 20% on Friday after forecasting a decline in full-year revenue.
  • This is the worst day for Nike shares: the company lost $28.41 billion in market capitalization.
  • Nike’s forecast sent shares of competitors and sportswear retailers tumbling.

Nike shares plunged 20% last Friday after the company posted an unexpected decline in full-year revenue. That has made investors even more concerned about the pace at which the sportswear giant is struggling to lose market share to rising new brands such as On and Hoka.

The drop was the worst day for Nike shares, with the company losing $28.41 billion in market capitalization in one day.

Nike predictions

The fall in shares occurred against the backdrop of pessimistic forecasts from Nike: the company expects a decline in revenue in 2025.

On Thursday, June 27, the corporation presented a forecast for the 2025 financial year, which was below analysts’ expectations. Revenue is forecast to decline by a mid-single-digit percentage, which contrasts with analysts’ forecasts of nearly 1% growth.

This conservative forecast, according to Nike representatives, is intentional. The company wants to lower expectations in order to exceed them in the future.

Nike’s forecast caused a negative reaction in the market. Shares of rivals and sportswear retailers in Europe, the UK and the US fell. Thus, British retailer JD Sports lost 5.4% at Friday’s close, shares of German Puma fell 1%, while shares of Adidas rose slightly.

Rise of industry competitors

Nike’s share of the U.S. athletic shoe market is falling. Nike’s U.S. athletic footwear market share in the running footwear category declined from 35.37% in 2022 to 34.97% in 2023, and down from 35.40% in 2021, according to GlobalData.

At the same time, the share of other sports brands such as Hoka, Asics, New Balance and On in the global market increased from 20% in the period 2013-2020 to 35% in 2023.

At the same time, Nike is developing a strategy to combat falling sales:

  • Reduction of assortment. Nike has trimmed its number of redundant brands, including the Air Force 1, as part of a $2 billion cost-cutting plan launched late last year.
  • New price offers. The company is revamping its offerings, introducing new sneakers priced at $100 or less in countries around the world to appeal to price-sensitive consumers.
  • Innovation. This year, Nike will also release updated versions of the Air Max and Pegasus 41 with a full-length ReactX foam midsole for improved stability.