Nike warned investors on Thursday that its sales revenue could fall as it cuts back on classic shoes and focuses on innovating new products.
The company expects revenue to dip by a low-single-digit percentage in the first half of its fiscal year, beginning in June, according to Reuters. Nike CFO Matthew Friend told investors in a post-results call on Thursday that the company intends to make fewer of its classics, like Air Force 1s and Pegasus running shoes, in favor of new products.
“We know Nike’s not performing at our potential,” Chief Executive Officer John Donahoe said on a conference call, according to Bloomberg. “It’s been clear that we need to make some important adjustments.”
Nike shoes at a Macy’s store on March 21, 2024, in San Francisco, California. (Photo by Justin Sullivan/Getty Images)
Donahoe told investors that new running shoes were on their way this year, including shoes targeted at “everyday runners” with Nike Air cushion support.
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Back in December, Donahoe told investors about a $2 billion savings plan to cut costs over the next three years. In February, the company stated that the plan would involve reducing its global workforce of 83,700 employees by 2%.
Nike is the world’s largest sportswear retailer, according to Statista, outpacing competitors like Adidas and Puma in footwear revenue by at least $15 billion in 2022. Footwear makes up the majority of Nike’s profits at 68%, according to the same source.
The retail giant has recently faced challenges due to shifting consumer demand for the look and feel of shoes and industry competitors like Hoka and On, per a Reuters report.
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