Nike on Thursday forecasted an unexpected decline in its fiscal 2025 revenue due to weaker consumer demand for its sneakers, with a growing preference for emerging brands like On and Hoka, causing its shares to drop over 12% in after-hours trading.
Nike stated that it expects annual revenue to decline by a mid-single-digit percentage. Analysts previously projected a 0.91% growth according to LSEG data. The fourth-quarter revenue also did not meet expectations.
The company's stock has fallen 13% so far this year, and if Friday's decline continues, its market value will shrink by over $15 billion.
As the maker of Air Jordan, Nike has sought to boost sales through its direct-to-consumer channels, particularly in North America, but has yet to see success as consumers become more selective in their spending. Competitors On and Hoka from Deckers have captured some of Nike's market share with their trendier offerings.
In after-hours trading, shares of these two companies also fell 1% to 2%.
To curb further sales declines, Nike has trimmed excess inventory of brands like Air Force 1 and invested in producing better running shoes, such as adding midfoot cushioning for increased stability, and plans to launch a new version of the Air Max series.
Nike also hopes this year's Olympics will help it regain market share by showcasing performance products like the Alphafly 3 and Pegasus running shoes.
