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As the athletic apparel industry continues to get more competitive, the industry giant Nike is struggling to maintain its market share.
On Tuesday, the Oregon-based company released reports on its latest orders and sales for the last quarter of the fiscal year, which ended on May 31. According to The Wall Street Journal, Nike reported that profits fell two percent in the final quarter, while revenue in the United States remained relatively unchanged, increasing by 0.1 percent.
Despite a six percent increase in overall revenue, Bloomberg reported that the company failed to meet industry expectations on multiple fronts. Nike’s fourth-quarter revenue of $8.24 billion didn’t meet predicted $8.28 billion, while future sales increased by 11 precent compared to the expected 13 percent.
The report led to a nearly four percent fall in Nike’s shares during early trading on Wednesday, adding onto the 15 percent drop from the beginning of the year after the market closed on Tuesday.
Nike is likely struggling to find consistent growth due to the increasing market shares of companies like Adidas and Under Armour. The two companies have been in the spotlight this year, with Adidas signing a long-term deal with Kanye West while Under Armour has endorsement deals with the NFL, NBA, and MLB MVPs in Cam Newton, Stephen Curry and Bryce Harper, not to mention New England Patriots quarterback Tom Brady.
With other companies causing competition in the industry to heat up, Nike must find ways to increase its stagnant sales in the United States and in the basketball shoe segment. Although they are still far and away the largest apparel brand, reports like this could be signaling some legitimate problems for Nike.
