NEW YORK — Nike is in a major slump.
The company’s global sales dropped 9 per cent last quarter, including a 17 per cent drop in China, Nike said Thursday.
In North America, Nike’s largest market, sales dropped 9 per cent.
But the results weren’t as bad as investors feared: Nike’s stock (NKE) inched up 4 per cent during after-hours trading Thursday. Still, the company’s stock has dropped around 30 per cent over the last year.
The largest shoemaker in the world faces a consumer slowdown and tough competition from upstart running brands like Hoka and On. Customers are changing their behaviors, passing up expensive sneakers and athletic clothing for basics.
Nike is also trying to recover from strategy mistakes. The company is cutting back supply on its classic sneaker lines Air Force 1 and Pegasus to try to juice demand and sell these sneakers at full prices. Nike also wants to push shoppers to buy new, higher-priced Air Max shoes and newer Pegasus products.
In recent years, the company has slashed the number of traditional retailers it sells to, including DSW. Instead, it shifted more of its inventory to its own channels, especially online. But the abrupt change hurt Nike’s sales, and Nike has since brought back some of those partnerships.
“Nike took it too far and underestimated the importance of third-party retailers,” Neil Saunders, an analyst at GlobalData Retail, said in a note to clients in June.
Nike is betting new CEO Elliott Hill, a former Nike executive who the company brought back last year, and partnerships with celebrity brands like Kim Kardashian’s Skims can help improve profits.
NikeSkims, a new brand from Nike and Skims tailored to women, will launch in the United States this spring.
This is a developing story and will be updated.
Article by Nathaniel Meyersohn.
