Nike’s steepest Decline in Decades

The world’s largest sportswear company saw a revenue decline in the mid single digits in the company’s current fiscal year. On the other hand, the investors were expecting an increase. Nike’s management team which is led by Chief Executive Officer, John Donahoe has faced major criticism from Wall Street. The prolonged slump sparks the stock’s biggest rout since 2001.?

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Nike Inc shares lost close to $27 billion in market value. This Is the most it has fallen in 13 years due to their sales slowdown and growing criticism. A decline of 17% over the past year while the shares plunged 20% in the recent trading session. This has raised concerns about declining demand and rising competition from companies such as On and Hoka, as well as Nike's long-standing rival Adidas AG.

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Co-founder of Nike, Phil Knight reiterated his support for Donahoe in a statement. "I am optimistic about Nike's future and John Donahoe has my unwavering confidence and full support," Knight said, adding that he believes in the company's plans.

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John Donahoe was announced as Nike's CEO in January 2020 after the CEO stints at auction site eBay Inc. and cloud computing platform ServiceNow Inc. Nike witnessed huge growth in their e-commerce business after this take over. This signalled Wall Street that the retailer was committed to modernising its digital operations.

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Donahoe created a reconstruction plan for the sportswear company last year in December to cut down $2 billion due to weak sales. This included cutting jobs all over the world by 2%. Layoffs at its Oregon headquarters and its European hub outside Amsterdam was a part of this plan.?

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His perspective of the current fiscal year is the year of transition for Nike as it starts a 'multiyear' cycle of introducing new products, focusing on increasing the speed at getting products to consumers. Although the analysts voiced their concerns that the new products would take more time to arrive than usual.?

#Nike #ShareMarket #WallStreet #Adidas #Sportswear