Over the past several decades, sportswear and apparel giant Nike has emerged as one of the most iconic brands on the entire planet, but it sounds like the company is in the midst of some severe financial problems as the company’s stock price absolutely plummeted on Monday.
According to a report from Matthew Kish of The Oregonian, the company’s stock price fell after the company announced that sales are expected to decline this year.
“Nike shares on Friday tumbled nearly 20% after the company said it expected sales to decline in its new fiscal year, the latest sign of severe turbulence at Oregon’s biggest company,” Kish wrote on Monday morning.
“It was the biggest one-day drop in Nike history, wiping out roughly $28 billion in shareholder wealth.”
While this was a massive single-day drop in the stock price, Kish points out that the company’s stock price has been consistently falling for quite a long time.
“Even before Friday’s tumble, Nike’s stock had been heading steadily downward after climbing above $170 in November 2021. Shares closed Friday at $75.36,” Kish wrote.
Kish points out that under current CEO John Donahoe Nike has shifted its strategy to betting big on direct sales as well as the popularity of some of the brand’s classic shoes like Air Jordans, Dunks, and Air Force 1s, focusing less on wholesale and innovation. Apparently, that’s not working out for them.
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