The Nike stock has lost nearly 70% of its value since its peak in the winter of 2021. Earnings continue to disappoint, and growth in demand for its products has slowed.
A large portion of the brand's revenue comes from footwear sales (67%), a segment that historically enjoys high margins. Apparel follows at 28% of sales. North America (42.3%) remains Nike's primary market, ahead of the Europe-Middle East-Africa region at 26.5%.
FY 2025 Revenue fell by nearly 10% to $46.3bn. The company's net income, after increasing 12% in 2024, dropped by 45% to $3.2bn. Some analysts attribute these declines to a loss of interest in the brand's products. For several years, Nike's sales have relied on its iconic franchises (Air Force, Jordan), which were bolstered by the surge in sneaker culture. Recently, several formidable competitors have emerged and are beginning to carve out their place in the market.
The rise of Hoka and On.
The era when a handful of giants shared the athletic footwear market is over. For several years, outsiders have been upsetting the hierarchy. Amongst them, there is the French-born brand Hoka, which has established itself as the benchmark for trail running thanks to its technological innovations. Its net sales jumped 23.6% y-o-y to €2.2bn. On the stock market, the shares of its parent company, Deckers Outdoor Corporation (owner of UGG and Teva), have doubled since their 2022 low and are now trading at 14.7x earnings.
On the Swiss side, On Holding has targeted the premium and lifestyle segment. With an identifiable design and prices ranging between €160 and €200, the brand cultivates scarcity by avoiding promotions. Launched in 2010, the company entered a new dimension in 2019 with the arrival of Roger Federer as a shareholder and active partner. In 2025, its revenue surpassed CHF 3bn with a record gross margin of 60%. After falling by half following its IPO, the stock tripled to peak in May 2025. The shares are trading at 25x this year's expected earnings.
These rising stars are entering an already dense ecosystem. American brands New Balance, Saucony, and Brooks, China's Anta, Japan's Asics and Mizuno, Germany's Adidas and Puma, and France's Salomon are already engaged in fierce competition. Added to this are retailers, who now offer serious alternatives capable of competing with the sector's global leaders.
Competition already priced in
Even as outsiders gain more traction, the American brand remains in the lead. GlobalData attributed it a 14.1% market share in 2024, well ahead of Adidas at 8.9%. But behind them, outsiders are exerting strong pressure that the logistical power of the two leaders can no longer contain. Nike is struggling to justify its prices and its lack of technological renewal.
Its mass-market positioning has even become a problem when faced with specialized or more niche players. The American firm is seeking to reclaim certain neglected business segments, as demonstrated by the relaunch of its ACG brand for trail running.
But the turnaround will be long. The earnings release on Tuesday, March 31, did not provide the sign of a rebound expected by the market; projections are bleak and the recovery plan is struggling to materialize. The stock lost 15.5% during trading on Wednesday.
Valuation ratios are back to relatively low levels. Wall Street does not like losers. Neither does CEO Elliott Hill. "I hate losing, and we have work to do in some places," he stated during a press conference. The market, however, is still waiting to be convinced: with yesterday's drop, the stock has returned to levels not seen since 2014.
