NIKE, Inc. (NYSE: NKE) shares are heading toward the longest losing streak in company history.
The retail giant stock has declined for ten consecutive days, marking an over 11% loss. If NKE stock ends the day at $92.10, it will mark the lowest point since November 2022, as per data provided by Dow Jones Market Data Group.
The annual losses for Nike are 16%, which mirrors the equivalent gain in the S&P 500. The market capitalization has decreased by nearly $17 billion.
The situation escalated dramatically on Wednesday after Foot Locker, a retail partner that relies on Nike for nearly 50% of its merchandise, reduced its forecast. Mary Dillon, the CEO of Foot Locker, cited “price-sensitive” consumers as a significant concern. In addition, the company decided to suspend its dividend payments. Consequently, the shares of Foot Locker, Inc. (NYSE: FL) witnessed a drop of more than 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.
Despite dropping to 3.2% in July from over 9% the previous year, inflation remains high, and consumers are dealing with increased expenses for credit cards, auto loans, and mortgages, which have gone beyond 7%.
But even before the bombshell, Nike had already been experiencing its ninth consecutive day of decline in stock value. DICK’S Sporting Goods, Inc. (NYSE: DKS), another partner seller, posted a 23% profit slump, lowered its profit forecast and CEO Lauren Hobart warned about rising theft.
Nike’s China business grew by 25% in the fourth quarter, reported in June. Since then, economic data from China has shown a weakening trend. Analysts predict the region may fall short of its 5% growth target this year. JPMorgan has already lowered its expectations, and the youth unemployment rate in China has reached 21%. Recently, the People’s Bank of China reduced interest rates.
Moreover, NIKE, Inc. (NYSE: NKE) posted earnings of 0.66 cents per share for the fourth quarter, missing the analysts’ estimate of $0.67. Full-year profits plunged 14% to $3.23 per share. Furthermore, inventory levels – while improving – remain a work in progress.