For all the “doom and gloom”, Nike will stay number one, according to Powell – millions worldwide, including young people, remain loyal – but its mistakes have dented its dominance.
“Will Nike be the gorilla they once were? I don’t think so. Can the brand come back to growth and profitability? Yes,” Powell says.
“When you shut down innovation, you don’t turn it back on and it goes right back to full speed,” he adds.
Powell thinks Nike’s turnaround plan, called “Sport Offense”, will start to show positive signs next year.
Hill said Nike had “more work to do” on its sportswear, Jordan brand and in China as the company announced quarterly revenues of $11bn, which undershot analysts’ expectations.
Notably, the company cited “headwinds” in China, where revenue declined by 26%.
Sales of its Jordan brand were also down globally. Hill said the firm had been “oversupplying” the iconic retro shoe and will now reduce the volume and frequency of products under the brand.
Nike said it expected revenues to decline by “high-single digits” in the financial year ahead, adding that it planned to make savings of $2.5bn by 2031, some of which will result in job losses.
Nike’s chief financial officer Dave Denton said: “Our results are below both our expectations and our potential, and we are focused on closing this gap.”
The company’s shares fell by more than 8% in extended trading in New York after the earnings were announced.
Last year the company launched a spin-off campaign to its iconic “Just Do It” slogan aimed at younger generations with the line “Why Do It?”
Young people, and future sporting stars, may ask themselves: Why Nike?
Additional reporting by Osmond Chia
