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Nike warned investors Thursday that sales could decline as it sells fewer classic shoes and focuses on innovating new products.
The company expects sales to fall in the low single digits for the first half of its fiscal year, which starts in June, Reuters reported. Nike Chief Financial Officer Matthew Friend told investors on Thursday’s post-earnings conference call that the company will reduce production of staples like the Air Force 1 and Pegasus running shoes in favor of new products. That’s what he said.
“We know that Nike is not living up to its potential,” CEO John Donahoe said on a conference call, according to Bloomberg. “It’s clear that some important adjustments need to be made.”
Nike shoes at a Macy’s store on March 21, 2024 in San Francisco, California. (Photo by Justin Sullivan/Getty Images)
Donahoe told investors that new running shoes will be released this year, including a shoe targeted at “everyday runners” with Nike Air Cushion support.
Related: Casual runners are running away from Nike and towards competitors – here’s why
Mr. Donahoe told investors in December of a $2 billion savings plan to reduce costs over the next three years. The company announced in February that its plans include cutting 83,700 employees worldwide by 2%.
Nike is the world’s largest sportswear retailer, with footwear revenue expected to exceed competitors such as Adidas and Puma by at least $15 billion in 2022, according to Statista. The same source said footwear accounts for the lion’s share of Nike’s profits, at 68%.
The retail giant has recently faced challenges due to changes in consumer demand for the look and feel of its shoes and industry competitors such as Hoka and On, Reuters reports.
Related: ‘A round from hell’: Tiger Woods ends 27-year partnership with Nike
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