Gloomy sales prospects! Nike changes leadership, Skechers plummets, European and American footwear stocks decline

Sales prospects dim, global sportswear giants are facing an industry headwind.

On Thursday, American sportswear brand Skechers' stock price plummeted by 9.6%, marking its worst single-day performance since February, wiping out all gains since the beginning of the year.

The trigger for the decline was the pessimistic remarks made by the company's CFO John Vandemore at an industry conference.

Vandemore stated that sales in major retail markets globally were worse than expected, saying, "So I expect the situation in the second half of this year to be more disappointing than we initially anticipated."

Stock prices of shoe industry peers like Nike and Under Armour briefly dropped after Vandemore's speech, then rebounded. Skechers' competitor On Holding AG fell by 2.4% that day, while Deckers Outdoor dropped by 3.26%.

Similarly facing sales challenges, Nike received news of a change in leadership overnight.

On September 19, Nike announced that company veteran Elliott Hill would succeed John Donahoe as CEO, effective from October 14, 2024. Donahoe will retire on October 13.

After the announcement, Nike's stock price surged by about 10% in after-hours trading. Year-to-date, Nike's stock price has fallen by 24% to around $81, far below the high of $177 set in November 2021.

In June this year, Nike lowered its profit guidance, triggering a sharp market reaction with the stock price plummeting nearly 20% in a single day.

North America is Nike's largest market, accounting for 40% of the company's revenue. In the previous fiscal year ending in May, declining footwear sales led to a drop in North American revenue. Meanwhile, Nike also faces competition from a wave of new brands, including Hoka under Deckers Brands and On Running.

Analysts believe that the leadership change may help Nike regain its competitiveness, including in product innovation and marketing strength