Nike is expected to report its slowest revenue growth in two years in its soon-to-be announced fourth-quarter results. Nike's revenue is expected to increase by only 0.2 per cent Y-o-Y to $12.85 billion during the quarter, according to LSEG data. Analysts on average expect Nike's adjusted earnings to grow by 26.4 per cent to 83 cents per share from a year earlier.
The brand attributes this slowdown to a lack of innovation and increased competition from emerging brands like Deckers' Hoka and Roger Federer-backed On.
Despite the challenges, Nike is banking on the upcoming Olympic Games in Paris to regain some market share. The company plans to spotlight performance products like the Alphafly 3 racer and the Pegasus running shoe during the event.
Nike's recent focus on its direct-to-customer business, moving away from wholesale, has not yielded the desired results, worsening its demand issues. In March, company executives announced plans to double down on wholesale partnerships to boost sales.
As of May 25, On's market share in the footwear category at retailer Dick's Sporting Goods had risen to 12 per cent from 8 per cent in January, while Hoka's market share increased to 13 per cent from 8 per cent, according to YipitData. Meanwhile, Nike's market share at Dick's Sporting Goods fell to 32 per cent in May from 39 per cent in January.
The rising popularity of these upstart brands, especially in the running category, has also prompted Nike to implement a $2 billion cost-saving plan over three years. This plan includes scaling back on key sneaker lines such as the Air Force 1 shoes.
