Nike Inc. (NYSE:) has recorded a considerable decline in revenue in the first quarter, with figures below analyst expectations. The company is currently dealing with a drop in demand in the Chinese market, as well as facing intense competition from emerging brands globally.
The sportswear giant has been negatively affected by the decline in consumer spending in China, which has seen a fragile recovery from the pandemic. This is partly due to high unemployment rates among young people and a prolonged recession in the real estate sector. Additionally, there has been a shift among consumers in the region toward locally manufactured products.
Despite efforts to boost sales by launching new products such as the Air Max Dn and Pegasus 41, Nike has yet to reap the sales benefits of these innovations. Market analysts have noted that the company’s strategies have been insufficient to stimulate demand or regain market share lost to competitors such as Deckers’ Hoka and the On brand, backed by Roger Federer.
First quarter financial results showed a drop in net income to $11.59 billion, compared to $12.94 billion in the same period last year. This decline was more severe than the 10% decline to $11.65 billion that analysts had projected based on estimates compiled by LSEG.
Reuters contributed to this article.
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