In the world's sports and fitness track, Nike and Adi can be described as the two trendy brands of sports and fitness, but just recently the news that Nike could not sell came, its overall revenue increased slightly, and the stock price plummeted. Can Nike turn the tables on the Olympics?
1. Nike can't sell anymore?
According to a report by Interface News, American sports products company Nike (NIKE) announced its full-year results for fiscal year 2024.
According to the performance report, Nike's full-year revenue in fiscal year 2024 was 51.4 billion US dollars (about 373.570 billion yuan), a slight increase of 0.3% year-on-year. In terms of channels, Nike's full-year revenue from its self-operated business was US$21.5 billion, a year-on-year increase of 1% on a constant exchange rate basis; Nike's reseller business reported full-year revenue of $27.8 billion, up 2% year-over-year on an constant currency basis.
Nike's stock price plunged 20% as growth concerns arose from lackluster sales results, wiping out more than $28.4 billion in the company's market value. Nike's latest forecast for fiscal 2025 revenue will fall by a mid-single-digit percentage, while analysts expect it to grow by nearly 1%.
Nike Greater China's fiscal year 2024 revenue was US$7.5 billion, up 8% year-on-year on an constant currency basis, achieving seven consecutive quarters of positive growth. Nike's full-year performance in North America, the largest market, fell 1% year-on-year, and the full-year revenue of the second-largest EMEA market was the same as that of the previous fiscal year. Even the low-base Asia-Pacific and Latin American markets only delivered a report card of 5% revenue growth for the full fiscal year.
A number of investment institutions believe that the upcoming Olympic Games in July will become an important event to stimulate Nike's performance growth, because Nike will launch a large number of new products during the Olympics. Nike revealed at the Olympic launch event in April this year that the brand will launch the new Nike Blueprint series and Nike Pegasus running shoe series with Air as the main technology.
2. Can Nike, which has slightly increased revenue, rely on the Olympics to turn around?
In recent years, Nike, as a world-renowned sports shoes and apparel brand, is facing unprecedented challenges, its market performance has gradually weakened from its former glory, revenue growth has slowed down, and even declined in some periods.
First of all, the situation that Nike can't sell can be said to be expected to a certain extent. In recent years, the global economic environment has been complex and volatile, consumer purchasing power has generally declined, and market demand has begun to decline. This trend has had a direct impact on Nike's sales performance, and inventory pressure is increasing. At the same time, with the improvement of consumers' awareness of health and sports, the overall size of the sports footwear and apparel market is still growing, but the competition is also becoming more and more fierce. As an industry leader, Nike's market share has been squeezed by both emerging brands and international peers.
In terms of competitors, emerging brands have risen rapidly and eaten away at market share with their unique product designs and precise market positioning. These brands not only focus on technological innovation, but also use social media and digital marketing to connect with young consumers. In contrast, although Nike has a strong brand influence and technology accumulation, its response speed and innovation ability are insufficient in the face of rapidly changing market demand.
Secondly, the current market is in a state of reverse consumption, consumers are more rational and more sensitive to prices. As a high-end brand, Nike's products are priced relatively high, which undoubtedly increases the purchase threshold for consumers during the economic downturn. Although Nike invests heavily in technological innovation and brand building, these costs are ultimately passed on to consumers, resulting in high product prices. Under the reverse consumption trend, consumers are more willing to choose more cost-effective products, rather than blindly pursuing brand premiums. In addition, Nike also has certain problems in its marketing strategy. In the past, Nike used to increase brand awareness and reputation by heavily advertising and sponsoring sporting events, but these tactics are gradually diminishing in today's market environment.
Third, for Nike, the Olympics are undoubtedly an important promotional opportunity. As one of the world's largest sporting events, the Olympic Games attract hundreds of millions of viewers around the world. As a sponsor and equipment provider for many well-known athletes, Nike can showcase its latest products and technological achievements at the Olympic Games, thereby enhancing its brand image and market share. However, the Olympics publicity opportunity is not a panacea, and it can only bring short-term exposure and attention to Nike, but it will not fundamentally solve the long-term problems it faces.
Fourth, to truly achieve a turnaround, Nike must return to the product itself and strengthen its core competitiveness. It is not enough to rely on the short-term marketing effect of the Olympics, because consumer loyalty is ultimately built on the quality of products and services. Nike needs to increase R&D investment, launch more innovative products that meet market needs, improve the technical content and functionality of products, and optimize supply chain management to ensure rapid response to market changes, reduce inventory backlogs, and improve operational efficiency. If Nike wants to stay ahead of the competition in the fierce market, the key is to win the continuous recognition of consumers. It's not just about providing quality products, it's about building a positive brand image, communicating brand values, and building an emotional connection with consumers.
Therefore, the current challenges faced by Nike are complex and profound, to achieve a "turnaround", it is by no means only relying on the marketing activities of the Olympic Games can be solved, only to win the continuous recognition and support of consumers, Nike can achieve long-term stable development and remain invincible in the fierce market competition.