Nike’s financial woes have not been limited to just one partner, the NFL. The company experienced a significant drop in shareholder value, losing $28 billion as its stock plummeted nearly 20 percent in one day. This decline occurred after Nike announced expectations of sales decreasing in the upcoming fiscal year. The company’s stock has been steadily declining since November 2021, from over $177 per share to $75.65 at closing on Friday. This drop marked the worst day for Nike shares since its initial public offering in December 1980, prompting the company to lay off two percent of its workforce, reducing $2 billion from the payroll.
The recent challenges have impacted Nike beyond uniform designs. The company’s CEO John Donahoe could potentially be replaced, reflecting other significant changes at the top level. Issues such as focusing too much on established brands, a lack of innovation in new styles, and discontent with retail partners due to direct-to-consumer sales have impacted Nike’s profitability. Despite this, Nike’s contract with the NFL remains in place until 2028 and while the NFL may resolve its $14 billion loss through future court decisions, Nike’s ability to recover and reverse its downward trend remains uncertain at this time.