Shares in US sportswear giant Nike (NKE:NYSE) briefly found some air in the latter part of 2023 but a pre-Christmas warning on revenue and evidence of weak trading in the interim have left investors feeling deflated.

This is the unpromising context for the company’s year-end and fourth-quarter trading update on 27 June.

Back in March, third-quarter earnings actually came in ahead of forecasts at $0.77 against the expected $0.73 but the company’s weak sales outlook dominated the agenda. Nike has seen soft demand in Europe, the Middle East and particularly China, where tensions with the US are unhelpful.

The firm has felt pressure from smaller more agile specialist brands like Brooks, Hoka and On Running, and heritage brands like New Balance have been cutting into its market share, even if only at the margins. Nike’s reliance on its Jordan brand and basketball shoes in general may mean it have lost some of its focus in other areas.

The market will be hoping for signs of improvement as Nike enters a new financial year and also for progress on the $2 billion cost saving plan unveiled at the end of 2023.

There may be some concern that the athleisure trend, which saw people wear sportswear for work, play and exercising and was therefore supportive to sales, has started to ease. 

‹ Previous2024-06-20Next ›