Nike CEO John Donahoe comes under fire from Wall Street after lackluster performance

Core Viewpoint - Nike's fiscal 2025 guidance has been revised downward for the fifth time in six quarters, pushing growth expectations further into 2025, raising concerns about management credibility and potential leadership changes [1][2]. Financial Performance - Nike expects fiscal 2025 sales to decline by mid-single digits, a significant shift from previous growth expectations [2]. - The company warned of a 10% decline in sales for the current quarter, which is worse than the 3.2% drop projected by LSEG [2]. - Nike's stock has decreased by approximately 25% since John Donahoe became CEO in January 2020, underperforming the S&P 500 and retail-focused ETFs [2]. Management and Strategy - Analysts have raised concerns about the effectiveness of Nike's management under Donahoe, particularly regarding the company's response to changing consumer preferences and market dynamics [3][4]. - The company is facing challenges in rebuilding relationships with retail partners after prioritizing a direct-selling strategy, which has led to slow wholesale orders [3]. - There is speculation about potential management changes, with discussions around internal and external candidates for leadership roles [6]. Market Position and Competition - Nike is struggling to retain its core customer base, particularly runners, as competitors like On Running and Hoka have gained market share [4]. - Analysts have noted that Nike's focus on classic sneaker lines has alienated customers seeking new styles and innovation [3][4]. - Despite the challenges, Nike's annual sales have increased by approximately 37% from $37.4 billion in fiscal 2020 to $51.36 billion in fiscal 2024 under Donahoe's leadership [6]. Stakeholder Sentiment - Phil Knight, Nike's founder, expressed confidence in Donahoe's leadership and the company's future plans, indicating a divide in sentiment between management and market analysts [7].