Nike, a leader in athletic clothing and sports equipment, is facing major falls in revenue.
This is the second quarter in a row where the company failed to meet expectations. It hasn’t faced such severe economic uncertainty since the 1980s. Business Insider reports:
Nike’s stock just suffered its longest losing streak in over 40 years amid weakened investor sentiment as the retail giant grapples with a slowdown in China, its key growth market.
Its share price fell 1.4% to $101.46 at Tuesday’s close – declining for a ninth straight day and marking the longest slump since the company’s initial public offering in December 1980. The stock hit a nine-month low of $100.73 earlier.
Nike repeatedly took the side of left-wing causes in culture war issues. Its cozying up to China, a major market, has also made headlines. CNBC adds:
“The U.S. consumer is becoming increasingly selective with spend. We’ve heard companies talk about wallet share shifting towards services and experiences and away from discretionary where they’re becoming a lot more selective,” Rick Patel, a retail analyst for Raymond James, told CNBC.
“There’s also an increasing amount of caution when it comes to what back half demand looks like when student loan payments resume in October. We’re talking about a consumer that’s already under pressure due to inflation that will go through even more pressure in the fall,” he said.
With the economy tightening at home and abroad, major American brands can no longer afford to become involved in contentious social issues. Nike could still learn from companies who distanced themselves, such as Netflix. Otherwise, it could go the way of Bud Light.
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