Nike's nightmare
A footwear faceoff
Good morning, trail blazers. This is your Stock Market Rundown for June 2nd, 2024. Thanks for tuning in today. Let’s get started:
TODAY’S TOP STORY: THE SNEAKER SHUFFLE
Nike is by far the top brand in the global sneaker game. But these days, a lot of Nike’s former customers who need to replace their sneakers are saying “Just don’t do it.”
Last week, the sneaker maker reported its slowest revenue growth in two years. Nike’s stock plunged 20%, and Wall Street analysts are slashing their price targets.
Problem is, upstart brands pulling are consumer attention away from legacy players. One such challenger: Hoka, which has grown its market share to double digits.
Hoka was founded in 2008 by two French trail runners who wanted to max out their speed during races in the Alps. They invented a shoe that’s light as an alpine snowflake, but has more cushioning than a king-sized bed at the Ritz. (As a bonus, short kings love the extra inch of height Hokas’ oversized midsole adds.)
In 2012, Hoka was acquired by Deckers, owners of other iconic footwear brands like Uggs and Teva. Yes, some of Hoka’s models look borderline cartoonish, but the sales figures are pretty cute: Hoka brought in $1.8 billion of revenue last year.
So, how is Nike coping with getting stepped on? They’re going with the McDonald’s strategy—grind down your prices.
Nike will soon introduce sneakers that cost $100 or less to attract budget-savvy customers and win back market share. Key lesson for Nike: just because your shoes have a swoosh doesn’t mean they can outrun the competition.
SO WHAT ELSE IS GOING ON?
And you thought pro football player salaries were pricey? The NFL fumbled its “Sunday Ticket” broadcast package, and now faces a $4.7 billion verdict for violating antitrust law. Never get between a football fan and his plans to spend his entire Sunday afternoon on his couch.
Did Wall Street just score a get-out-of-jail-free card? A recent Supreme Court ruling will make it tougher for the SEC to create new laws.
Amazon just smashed its previous all-time highs, hitting $2 trillion in market value, thanks to AI technology spurring big demand for its cloud computing services. Well, that and millions of downloads of spicy vampire romance novels.
Fast-fashion retail app Shein has filed to go public on the London Stock Exchange. Personally, I’m never shopping on Shein again… the cardigan I bought on it shrunk so much in the dryer, I’m using it as a tea cozy.
That’s a wrap for today, team; already looking forward to checking in with you tomorrow. Yours in capitalism, The Axe
Thank you so much for reading. If you enjoyed today’s Stock Market Rundown, the #1 thing you can do to help me out is forward it to a friend.