Nike shares have plunged by the most in 23 years amid doubts about demand for its casual shoes.
The sportswear giant tanked by as much as 18pc as trading began in New York – its worst performance since 2001 – after its latest outlook for the year ahead fell short of Wall Street expectations.
The maker of Jordan and Converse trainers said it expected a revenue decline in the mid-single digits during this financial year, compared to analyst expectations of 2pc growth.
If current losses hold, Nike’s shares were set for their worst day in more than two decades and wipe out around $27bn (£21bn) in market value.
“Nike shares are headed for a stay in the proverbial penalty box until new product innovations actually start to manifest themselves and management regains investor trust,” Wedbush analyst Tom Nikic said.
Nike has cut back on oversupplied brands including its Air Force 1 trainers to curb a worsening sales decline as part of a $2bn cost-cutting plan launched late last year.
Nike is set to roll out this year an Air Max version and a Pegasus 41 trainer with full-length foam midsole made from ReactX foam to boost sustainability, responding to concerns over stagnating innovation.
Sporting goods brands, such as Hoka, Asics, New Balance and On, accounted for 35pc of global market share in 2023 compared to the 20pc held over the 2013-2020 period, according to a RBC research report released in June.
“They know where the problems are, but they’re having trouble right now generating demand and it is going to be a transition period that is going to take some time in different markets,” Morningstar analyst David Swartz said.
The underperformance over the past year has led to some Wall Street analysts raising the possibility of a management shake-up ahead of the company’s investor day this autumn.
“In retail, if you have two bad quarters, you’re usually out the door,” said Jessica Ramirez, senior analyst at Jane Hali & Associates.
“I think it [a leadership change] is very much needed.”
Chief executive John Donahoe is in his fourth year of a five-year commitment as Nike’s top boss. The former eBay chief was hired to focus on strengthening the company’s online sales.
At least six brokerages downgraded the stock and 15 cut their price targets.
Nike has been approached for comment.
Read the latest updates below.