Nike Stocks on a Losing Streak
have experienced a 12th day of losses on the stock market, with the price falling from $109.69 on August 9 to now sit at $97.63 at the close of the market on August 24. This is the Swoosh’s longest run of declines since they went public in 1980. While the market has taken a hit recently, Nike’s decrease can’t be attributed to this, as the S&P 500 index of US shares have still had a YTD increase of nearly 14 per cent.
The losing streak comes right after a 9.9 per cent decrease in overall sales in the second quarter attributed to ‘ongoing consumer softness’. On top of this concern, there is also a deepening economic slowdown in China with a period of deflation where the prices of goods and services have declined. These falling prices are a risk to businesses as consumers are more inclined to wait out purchases expecting further cost reductions. Sam Poser, Williams Trading analyst, suggests the decrease could also be due to ‘not enough compelling new product offerings, and the old product has become stale’.
Despite the bleak outlook, Nike recently reported their full year results for the year ended May 31, 2023, and their revenue increased by 10 per cent compared to the prior year. The statement made by Matthew Friend, Executive Vice President and CFO, in this report (published June 29) is at odds with the current state of affairs; however, the market is notoriously fickle and this losing streak is only one small part of a big Nike story. Friend’s statement reads, ‘FY23 demonstrated the power of NIKE’s portfolio to fuel strong growth, year after year. We finished the year with midteens currency-neutral revenue growth and a healthy marketplace – setting the foundation for sustainable, profitable growth in FY24 and beyond.’ However, if this 12-day losing streak continues and the Swoosh don’t pick up their feet, Friend’s positive comments may not fully come into fruition.