Nike (NKE) stock took a major hit on Friday, plummeting as much as 19% after the retailer announced that it expects revenue to decline more than previously anticipated in the coming year. This news sent shockwaves through the market, with Nike stock on track for its worst single-day drop since 2001.
The company revealed on Thursday that it now expects revenue to fall mid-single digits in 2025, including a projected 10% decline in the first quarter. This is a significant departure from Nike’s initial guidance of overall sales growth in 2025. The disappointing forecast comes on the heels of Nike’s fiscal 2024 fourth-quarter results, which showed a 2% drop in quarterly revenue to $12.61 billion, below Wall Street’s expectations.
Nike CEO John Donahoe acknowledged that fiscal 2025 will be a transition year for the business, as the company works to reignite sales growth in the face of challenging market conditions. Analysts have expressed concerns about Nike’s performance, with Morgan Stanley downgrading the stock and cutting its price target.
Despite the setbacks, Nike executives remain optimistic about the company’s future, emphasizing their plans to introduce new products that will drive financial improvement by the end of the year. The market will be closely watching to see if these innovations can help boost Nike’s stock and regain investor confidence.
As Nike navigates these challenges, competitors like Adidas and up-and-coming brands pose a threat in the athletic footwear market. The company’s ability to stay ahead of the competition and deliver on its promises will be key to its success in the coming months.
Investors will be keeping a close eye on Nike’s performance and product pipeline as the company works to bounce back from this latest setback. Stay tuned for updates on how Nike plans to navigate these challenges and drive growth in the future.