Nike Falls Apart

By Douglas A. McIntyre Published Jun 28, 6:40AM EDT

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The latest Nike Inc. (NYSE: NKE | NKE Price Prediction) quarterly results show it is no longer a growth company.
Disappointed investors sold the stock down after the report.

For years, Nike Inc. (NYSE: NKE) has been the king of athletic apparel. In its stores, outlets like Footlocker, and online, Nike bested rival Adidas and smaller competition like Puma. Nike’s new earnings report shows that its position at the top of its industry is in trouble.

The results drove the stock through the floor, which meant, at one point, it plunged 15%. That may not be unusual, but the shares were already down 13% this year, while the S&P 500 is 16% higher. Nike used to be a growth stock, regarding revenue growth and stock price. Nike still describes itself as a “growth company” on the investor relations page of its website.

For the most recent quarter, revenue dropped 2% to $12.6 billion. Earnings rose from $0.67 per share to $0.99, but Wall Street expected better

The forecast for fiscal 2025, which has just started, shattered investor confidence. Nike said revenue could fall as much as 10% in the current quarter. CEO John Donahoe said, “Fiscal [2025] will be a transition year for our business.” Whatever that means, it is a bad omen.

Investors who have watched a company grow rapidly and consistently sell a stock down quickly when their beliefs are crushed. Nike has just done that, and investors remember their disappointments for a long time.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.