NIKE WARNS OF FURTHER REVENUE DECLINE AFTER WEAK QUARTER

Nike shares fell again this week after the company warned that revenue would decline over the coming year. The warning came in a first-quarter update that also included layoff warnings and a restructuring plan. Net income fell two per cent to $712m, from $727m a year earlier, and revenue dropped four per cent to $11.2bn. Nike said the fall was driven largely by China, where it reported a comparative decline of 26 per cent. The update followed Nike's removal from the S&P 100 index.

Nike's share price has fallen 76 per cent since peaking in 2021, according to the report. Its difficulties deepened earlier this year when Kylian Mbappe ended a 20-year association with Nike to join challenger brand On, in a deal involving Thierry Henry and an equity stake. Nike has since appointed Alexandre Arnault, formerly of LVMH, with executive chair Mark Parker citing his "reputation for helping iconic global brands evolve." Nike chief Elliott Hill told analysts the firm's performance business remained "not yet large enough to offset the pressure" in its sportswear, Jordan Brand and Greater China operations, adding that results would take time.

Nike's market capitalisation stands at $52bn, twice the size of Adidas, whose shares rose over one per cent on the day but have fallen 46 per cent over five years. Nike faces increasing competition from newer Asian sportswear brands as well as established European rivals, according to the report. Nike, Adidas and other members of the World Federation of the Sporting Goods Industry have begun lobbying to reduce tariffs. Separate reporting said Nike's difficulties in China and its sneaker business could lead to further falls in sales.