Nike shares are running toward the longest losing streak in company history.
The retail giant’s stock has fallen for 10 consecutive days, losing over 11%. A close of $92.10 would be the lowest since November 2022, as tracked by Dow Jones Market Data Group.
Annual losses are now at 16%, while the S&P 500 has advanced by the same amount. Nearly $17 billion in Nike’s market cap has been erased.
Wednesday’s selling accelerated after Foot Locker, which counts on Nike for about 50% of its products, slashed its forecast, with Foot Locker CEO Mary Dillon noting “price-sensitive” consumers. It also suspended its dividend. Foot Locker shares fell over 30% in intraday trading.
“Nike is an ‘unaffordable luxury’ with 61% of consumers living paycheck-to-paycheck,” Burt Flickinger III, managing director at Strategic Resource Group, told FOX Business.
While inflation eased to 3.2% in July, down from more than 9% last summer, it remains elevated and consumers are facing rising borrowing costs for credit cards, auto loans and mortgages, which topped 7%.
INFLATION BREAKDOWN: WHERE PRICES ARE RISING, FALLING
But even before the bombshell, Nike’s selloff was on its ninth day. Dick’s Sporting Goods, another partner seller, reported a 23% drop in profit, slashed its profit forecast and CEO Lauren Hobart warned about rising theft.
DICK’S SPORTING GOODS HIT BY THEFT, PROFITS FALL
Nike’s China business grew 25% in its fourth quarter, which was reported in June. Since then, the economic data coming out of the most populous nation has weakened. Economic growth in the region is expected to miss its 5% growth target this year, as firms including JPMorgan lower expectations. Additionally, the youth unemployment rate soared to 21% and the People’s Bank of China recently cut interest rates.
Nike, which reported fourth-quarter and full-year results in June, earned $0.66 cents per share, below analysts’ $0.67 estimate. Full-year profits fell 14% to $3.23 per share. Additionally, inventory levels – while improving – remain a work in progress.
“We expect first-quarter revenue growth to be flat to up low single digits, reflecting our decision to tighten first-half buys and restrain marketplace inventory,” said Nike Chief Financial Officer Matt Fried.