What's Wrong With Nike Stock?
Yahoo Finance ·
Nike ( NKE +1.35% ) is the largest athletic apparel and footwear company in the world, by far. However, although it's still the leader, cracks are letting in competitors, and it no longer controls the market. Nike investors have noticed, and the stock now trades about 79% off its high and down 35% over the past decade. That suggests massive disappointment. What's going on? Nike management wasn't reading the room and made a few missteps a few years ago that are still impacting it today. There were several converging factors, as there usually are in these cases, but the main ones were cutting off wholesale relationships and relying too much on its storied franchises. Together, this was a lethal combination because customers looking for great sportswear options weren't even seeing Nike in stores. Management was too confident in its leading position and fan loyalty, but consumers ended up finding competing brands like Hoka (owned by Deckers Outdoor ) and Brooks (owned by Berkshire Hathaway ) in other stores. The company has a new CEO, and it's now winding its way back to wholesale partners and innovation.
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