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The fall of global sports shoe brands following Nike

NIKE NKE 2024 07 01

Shares in Puma, Adidas and JD Sports fell after US peer Nike warned sales were expected to fall in fiscal 2025, trailing the industry.

Nike on Thursday said it expects revenue to decline in the mid-single digits for the year ending May 2025, attributing the decline to uneven consumer trends in the EMEA region and a planned decline in classic footwear franchises based on fourth-quarter trends. Analysts polled by FactSet expected revenue to rise 1.4% to $52.11 billion.

The gloomy outlook followed the rejection of its fiscal fourth-quarter guidance after the group saw sales of its lifestyle products (products perceived by consumers as an expression of style, lifestyle and social status) decline amid worsening economic conditions and a weak Chinese economy.

The warning sparked a revaluation of the sector, sending shares of British sportswear retailer JD Sports, one of Nike's European partners, down 4.1% to the bottom of the blue-chip FTSE 100 index. Industry peer Puma fell 2.6% and Adidas trading unchanged after a decline of 0.7%.

Nike shares fell more than 14% in pre-market trading.

However, the warning could be a tailwind for competitors, Citi analysts said.

"We believe this cautious product management and the more limited success of lifestyle products will continue to pose headwinds for JD Sports, but could create near-term opportunities for Adidas and Puma," the analysts said.

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