Nike’s announced that it's expecting quarterly sales to drop by 10%.
👉 Background: Nike is the world’s biggest sportswear brand with a market cap of over $144 billion USD. Over the years, Nike has been known for its iconic sneakers like the Air Force 1 sneakers and the Air Jordans.
👉 What happened: Nike’s announced that it's expecting quarterly sales to drop by 10%. This is a lot worse than the 3.2% drop investors were expecting. And after this announcement last week, its share price dropped over 20%, or $28 billion USD drop from its market cap.
👉 What else: Nike says its weak performance is partly because of slow economic activity worldwide. But given its competitors are growing their market share, there are concerns that Nike’s making too many big decisions for the short term.
💡If you get too caught up in small things today, you can often lose sight of the big things in the future.
💡Nike has been focused on cutting back $2 billion USD of costs by launching by cutting over 1,500 jobs. At the same time, its competitors like Asics, New Balance, On and Hoka have been cooking up new innovative designs.
💡This meant that Nike’s market share has dropped from 35.4% in 2021 to just under 35% in 2023. On the flip side, its competitors have seen a market share jump of 15%.
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