Nike cutting back on classic shoes after losing market share to newer rivals
NY Post
Nike warned on Thursday that its revenue in the first half of fiscal 2025 would shrink by a low single-digit percentage as the world’s largest sportswear maker scales back on franchises to save costs.
Nike’s warning came after the stock market closed, and shares were down 5.6% in extended trading. Executives acknowledged that Nike’s direct-to-consumer strategy was not driving growth as expected and that it was losing ground in the running category.
In December, Nike outlined a $2 billion savings plan, which included reducing the supply of underperforming products and improving its supply chain.
In a post-results call on Thursday, Nike CFO Matthew Friend told investors that the company was cutting back on orders of “classic” shoes such as the Air Force 1, as well as current Pegasus Running shoes, as it shifted its focus to upcoming launches and developing new products.
“It’s not just about a product or an item here and there — it’s about building a robust pipeline of innovation,” CEO John Donahoe said on the call.
Nike beat Wall Street estimates for third-quarter revenue and profit on the back of holiday season discounts and new sneaker launches, including the Ultrafly trail running shoe, which it views as a way draw back customers amid rising competition from brands such as On and Decker’s Hoka.
