Unlock the digestive of free editor
Roula Khalaf, the FT editor, chooses her favorite stories in this weekly newsletter.
Nike’s shares hit a five-year low on Friday as the sports clothing group warned of a global trade war, and consumer care was complicating its efforts to raise sales as part of a turn.
The company on Thursday evening predicted a greater decline than expected revenue for three months until May in a new obstacle, as it seeks to recover the market share for the long adidas rival and UPStart brands.
Nike’s shares were reduced to 9.3 percent in Friday morning trading at Wall Street, falling to their lowest level in five years and receiving the group’s market capitalization below 100bn $. The shares were slightly recovered to trade 6.1 percent lower during the afternoon session.
The fall is on the right track to be the largest Nike’s one-day stock price since the end of June, when it warned that sales would fall in 12 months to May 2025, and would be ranked as one of the largest in the last five years.
Main financial officer Matthew Friend on Thursday said the company was fighting “some external factors that create uncertainty in the current operating environment, including geopolitical dynamics, new tariffs, unstable foreign exchange rates and tax regulations”.
The company said it had enjoyed a strong holiday season, but had fallen down in its Jordan brand and a “double -digit” landing of sales from its classic shoe exclusivity. She also reported softness in demand from Chinese consumers.
Nike predicted a decrease in the percentage of “mediums” revenues in the current quarter, which goes to May, citing the impact of a strong US dollar and the “unfavorable shipment time” on its main North America market. Reuters surveyed analysts expect revenues in the current quarter to be 12.2 percent lower than the same period a year earlier.
“We are not satisfied with our general results,” said Elliott Hill, who came out of his pension in October to take over as chief executive. “We can and will do better.”
The company has been hobn by an unsuccessful focus on direct sales to consumers, a strategy that withdrew from part of a restructuring in December 2023. Analysts have also been critical of its dependence on lifestyle products and its over -based support.
This had resulted in the Nike Ceding Ground in a sneakers and athletics market different and athletics in Adidas and smaller competitors, premium as On, Hoka and Lululemon.
After amazing the market last June with the warning of his income, Nike announced its director general’s transition and withdrew its full year sales forecast in October, just weeks before Hill received the brakes.
Friend on Thursday said the company’s gross margin would be 4-5 points lower in the current quarter than 41.5 percent reported for three months to February.
The point of view took the splendor from its most recent trimester, when Nike $ 11.3 billion in revenue and $ 794 million in net income analyst estimates.
UBS analysts said there was a risk of Nike’s profits could get worse.
They said: “We do not believe that Nike has improved its product assortment or marketing enough to ensure that trends are not deteriorated. The good news is that the company has decided to increase investments in the close term in order to return to a long time.”
