Nike stock plummets 20%, its largest daily decline on record

Nike endured a tumultuous day on Friday when its stock plummeted 20%, leading to a staggering $28.41 billion drop in market value, after the company reported disappointing quarterly earnings and painted a cautious outlook for the year ahead.

The sportswear giant recorded a 1.7% revenue decline to $12.61 billion for the quarter ending in May, with earnings totaling $1.5 billion. Nike attributed these results to slower online sales and planned reductions in classic footwear lines.

The news also impacted shares of competitors: JD Sports saw a 5.4% drop, while Puma fell 1% in Europe and the US.

Nike’s forecast for fiscal 2025 predicts a mid-single-digit percentage revenue decrease, sharply contrasting analysts’ expectations of nearly 1% growth.

Over the past year, Nike’s stock has plummeted 17%. It has reported stagnant sales, marking its slowest growth in 14 years. According to analysts, the sportswear giant’s failure to innovate and its push towards direct marketing via its stores and websites are the main reasons for declining sales. Meanwhile, new sports brands like On Running and Hoka are picking up.

Taking on these challenges, Nike is implementing a $2 billion cost-cutting plan and launching new, more affordable sneakers worldwide.