Nike Preps Price Hikes While Planning Return to Amazon

Nike’s brand of champions has lately been more akin to the hapless Cleveland Browns, whose jerseys the company provides as part of its NFL partnership.

On Thursday, news broke that the iconic shoe giant will hike prices. Along with a return to selling directly on Amazon, it’s part of a handful of moves that the company hopes will tush-push its performance to a level more like that of the winning Philadelphia Eagles.

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Global sales fell 9% in the company’s latest quarter and 17% in all-important China. One major problem is inventory: Nike flooded the market with too much product and has been aggressively liquidating a buildup of now-stale fashions at a discount.

The inventory issue has whittled away at Nike’s gross margin, which fell 3.3 percentage points to 41.5% in the quarter ended February 28. Executives said they anticipate it will fall another 4 to 5 percentage points in the current quarter as it continues to dump inventory. Nike’s shares, meanwhile, have tumbled 19% this year. All the while, the company has shed market share: Its 14.1% hold on the global sportswear market last year was down from 15.2% in 2023, while rival Adidas’ market share jumped to 8.9% from 8.2%, and New Balance and On Running gained ground as well. Nike isn’t simply crossing its fingers and hoping for better luck, though:

• It will raise prices by $5 on shoes with a $100 to $150 price tag, starting June 1, and begin charging an extra $10 on those that sell for more than $150. While the company didn’t mention the threat of tariffs, Nike is heavily exposed in China, home to roughly 24% of its suppliers and 15% of its revenue, and Vietnam, where half of its footwear and almost a third of its apparel is made.
• Then, there’s Nike’s return to Amazon — the world’s largest e-commerce platform — for the first time since 2019. Independent merchants who sell the company’s wares on Amazon have been told they’ll be barred from selling some Nike products starting in late July. The move seems designed to claw back lost market share, similar to recent partnerships with Printemps and Urban Outfitters, the latter focusing on Gen Z.

Executives explained the price increases as part of normal adjustments in a statement to CNBC: “We regularly evaluate our business and make pricing adjustments as part of our seasonal planning.” Products under $100, Jordan Brand clothing, and Air Force 1 shoes won’t be impacted.

Merger Assist: Nike’s largest retail partner, Foot Locker, has also been mired in challenges, including a 6% sales drop in the latest quarter that was blamed partly on waning demand for Nike shoes. The company is slated to close 110 stores this year, but last week, rival Dick’s Sporting Goods said it plans to acquire Foot Locker for $2.4 billion. The combined company would unite two of Nike’s three major US wholesale partners while stabilizing Foot Locker’s business, which is more susceptible to downturns than Dick’s because of a lower-income customer base.