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Nike Cuts Back on Classic Designs, Including Air Force 1, to Adopt to the Sneaker Rivals

One of the most famous athletic brands in the world, Nike, is cutting on classic designs after last year’s sale “staled,” as the Nike executives called it. The company will focus on new products while cutting back on classics, including Air Force 1 and Pegasus sneaker models. 

The company is making adjustments 

Chief Executive Officer John Donahoe confirmed that the company needs to make important adjustments. The brand will primarily focus on Nike’s Air Max Dn, which is set to be launched soon. Many athletes at the Paris Olympics are expected to wear the newly designed Nike model. 

Bringing the revenue down 

Nike’s shares were down 5.6% in extended trading, and the company warned that revenue would drop in the first half of fiscal 2025 due to the cuts to its iconic shoes. However, CFO Matthew Friend remained optimistic and explained that it was not about popular products as much as it was about innovation. 

The drop in 2025 is expected to be minor 

The company said that predicted numbers for 2024 will remain the same, with the expected 1% growth. The accepted drop at the beginning of 2025 will be in the low single digits. 

Nike has more surprises for the brand’s fans 

The company will also present Pegasus 41 later in spring, dubbed the next generation of iconic Pegasus. However, Nike is not the only company that has experienced a decline in the past year. Adidas’ numbers were not looking great as well. There are two reasons: new brands and a lack of interest in sneakers. 

Nike’s savings plan 

In December, the company presented a $2 billion plan that included cutting underperforming products and improving the supply chain. At the time, the public did not know which sneakers would be cut. Nike beat Wall Street estimates for third-quarter revenue and profit, but that was insufficient to keep some models. 

Nike is restructuring 

The American athletic footwear and apparel brand’s revenue rose 0.3% to $12.43 billion, surpassing the prediction. The company also had a 3% jump in North America, its largest market, and a 5% rise in China, primarily thanks to the heavy promotion of Nike’s Jordans. David Swartz, analyst at Morningstar, suggested the company was restructuring, and this was only the beginning. 

The competition 

This could be partly because newer or lesser-known brands, such as Hoka or On Running, have been taking away Nike customers due to their thick foam soles, which were more comfortable for some sneaker lovers. Friend’s talk to investors and his statements about innovation supported this. 

Nike’s earnings in the last quarter 

The company’s reported net income for the last quarter that ended on February 29 was $1.17 billion, or 77 cents per share, compared with $1.24 billion, or 79 cents per share, a year earlier. 

It was without restructuring changes 

Excluding 21 cents per share related to restructuring expenses, the company said earnings per share would have been 98 cents.

Nike’s newer models were not as successful as older ones 

Jane Hali & Associates Senior Analyst Jessica Ramirez suggested that the company’s newer basketball sneakers did not reach the same popularity as the older models. Other experts also shared that some models were not as performance-driven as was the case at the peak of Nike’s popularity. 

German soccer players chose Nike and faced backlash

Starting in 2027, The German Football Association will cut ties with Adidas and switch to Nike. The historic decision faced backlash from politicians since Adidas is a German company supplying German soccer for seven decades. 

Nike also got in hot waters over English national team gear

The company was also in the headlines recently after England soccer team kits sparked controversy due to colors. U.K. Prime Minister Rishi Sunak reacted to the new uniforms for the EURO 2024 tournament and said that Nike should not mess with the country’s flag. 

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