Nike reports $11bn quarterly revenue, missing analyst expectations

Mbappé ends 20-year Nike association to join Swiss rival On

Nike reported quarterly revenue of $11bn that undershot analyst expectations, with the company forecasting further declines as it works through a multiyear turnaround led by company veteran Elliott Hill. The sportswear giant said it expects revenues to fall by “high-single digits” in the financial year ahead and announced plans to make $2.5bn in savings by 2031, some of which will come through job losses.

The revenue report came after Nike lost its biggest footballing star, Kylian Mbappé. The Real Madrid striker ended a 20-year association with the brand last week to join Swiss competitor On, which he said would see him “surrounded by innovators who dream of the same things I do.” Mbappé had been sponsored by Nike since he was nine years old. World Cup winner Lamine Yamal also left for Adidas, a move he suggested gave him the chance to stand out from Nike’s “star-studded roster.”

The Real Madrid striker’s departure raises the question of whether Nike can remain the top logo for not just elite athletes, but also the fans that idolise them. Nike built that position through signature deals including its mid-1980s signing of Michael Jordan. Nike was the firm that signed a deal with a rookie called Michael Jordan in the mid-1980s at a time when the company wasn’t a major player in basketball and was still mostly known for its running trainers. The gamble — spending its entire basketball budget on Jordan before he had even competed in the NBA — made Nike what it is today. The company built a shoe brand around him — Air Jordan — whose red and black colour scheme broke NBA rules, a marketing stunt Nike turned into publicity by paying the fines.

Nike went on to partner with generational talents Tiger Woods, Serena Williams and Cristiano Ronaldo, all of whom donned the Swoosh on their way to golf, tennis and football greatness. The brand retains partnerships with Williams and Ronaldo alongside the now-retired Jordan; Woods ended his association in 2024.

The stock-market standing of the world’s largest sportswear brand has slumped. Last month, Nike was ejected from the S&P 100 index after its share price tumbled 75% over five years, wiping out hundreds of billions of dollars in market value.

Hill, a company veteran coaxed out of retirement two years ago to lead the turnaround, said Nike had “more work to do” on its core sportswear, its Jordan brand and in China. His strategy, called “Sport Offense,” is producing signs of progress, though the pace of change has been described as “more marathon than sprint.”

Matt Powell, a veteran analyst and adviser in the sports retail industry, said Nike had made “several strategic errors” that have been difficult to reverse. He pointed to the company’s decision under former eBay boss John Donahoe to cut ties with retailers and sell only direct to customers online, and to making limited-edition items more broadly available.

“The more broadly available those shoes became, the fewer people were interested,” Powell said.

Powell also said Nike had spent research and development cash on digital operations rather than new products. “They really shut down their innovation on product. Someone jokingly said they were trying to turn Nike into eBay.” That jibe was aimed at Donahoe, whose four years at Nike coincided with the share-price decline: initial sales gains, driven by pandemic-era online shopping, gave way to cost-of-living pressures that curbed consumer spending, while demand weakened in key overseas markets such as China, prompting earlier rounds of cost cuts and redundancies.

Shop shelves that had been occupied by Nike were replaced by brands such as On and Hoka as newer footwear firms moved into the space.

Nike’s books still include top athletes, with its roster ranging from Rory McIlroy to Vinicius Junior.

Tim Derdenger, an academic in marketing and strategy, said Nike’s heritage partnerships no longer match how apparel sales move today. “[I’m] not saying that what they did wasn’t great, but it was in the past,” Derdenger said. “It’s not the future and it’s not the current and that is what drives apparel sales today.”

Derdenger compared Mbappé’s move to Jordan’s decision, decades earlier, to choose Nike over Converse and Adidas because the partnership gave the athlete the chance to become synonymous with one brand. “Athletes have egos and those egos want them to be a part of something big and that they’re the ones that are helping drive that change, that growth,” Derdenger said.

For all the “doom and gloom”, Nike will stay the world’s largest sportswear brand, according to Powell, because 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 said. “When you shut down innovation, you don’t turn it back on and it goes right back to full speed,” he added.

Powell said he expects Nike’s “Sport Offense” plan to start showing positive signs next year. The company last year launched a marketing campaign built around the line “Why Do It?” — a play on Nike’s iconic “Just Do It” slogan — aimed at younger consumers.