Nike Needs to Find Its Footing Ahead of Earnings

The shoe brand named for the Greek goddess of victory has been on a losing streak … or swoosh. Nike’s shares have been hovering around an eight-year low heading into its earnings call tomorrow. 

Investors will be watching for whether the shoe brand can shrug off slowdowns in Europe and China, how its wholesale business is faring, and whether it’ll soon cut off Converse as its sales plummet. 

All of Nike’s issues could boil down to one simple challenge: Cooler competitors are stealing market share.

Losing Momentum

Nike is trying to make a comeback under CEO Elliott Hill, who started in 2024 at a time when the shoe company seemed to veer off course. As direct-to-consumer competitors like On and Allbirds gained popularity, Nike shifted its focus from in-store sales to direct-to-consumer sales. Rivals swooped in to fill the shelf space. 

Hill has tried to reclaim market share with a renewed focus on wholesale, whose revenues climbed 8% in the winter quarter compared with an 8% drop in direct sales. Nike’s revenue rose 1%, depressed by a 17% slide in China. Rival sneaker makers are taking advantage of its lull:

• New Balance grew its sales 19% last year and 180% since 2020, when it became fashionistas’ favorite dad shoe. New Balance has raised its average price by about 30% over the past five years, proving consumers are willing to pony up for the right brand. The 120-year-old brand has also aggressively opened stores (80 just last year) while Nike lost store presence focusing on direct sales. New Balance expects to pass $10 billion in sales this year, putting it about $2 billion behind Nike. 
• Samba-maker Adidas is also trying to wrest market share from Nike after garnering record revenue. On, meanwhile, reported record sales last year and expects net sales to grow more than 23% next year to $4.4 billion. Another up-and-coming sneaker star, Salomon, passed $2 billion in sales last year under its parent company, Amer Sports, as celebrities scooped up XT-6s. 

Lacing Up: Nike’s still the world’s biggest shoe brand, but rivals are scuffing its market share. In addition to refocusing on wholesale, the shoe company is also testing new ways to up its cool factor. Nike’s new Mind sneakers are, as the name implies, focused on mindfulness (imagine: Crocs with sensory foam balls). The brand has also been quick to partner with Gen Z athletes like Alysa Liu.