Nike Stock Rout Deepens in Longest Run of Declines Since 1980 - Markets Insider

• Nike shares are on their longest losing streak since the company went public in 1980. 
• The stock has seen nine straight days losses amid concerns about a demand slowdown in China.
• Nike has shed more than 20% in market capitalization so far in 2023.

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Nike's stock just suffered its longest losing streak in over 40 years amid weakened investor sentiment as the retail giant grapples with a slowdown in China, its key growth market.

Its share price fell 1.4% to $101.46 at Tuesday's close – declining for a ninth straight day and marking the longest slump since the company's initial public offering in December 1980. The stock hit a nine-month low of $100.73 earlier.

Investor sentiment toward the sportswear giant soured in recent weeks after the company reported fourth-quarter earnings that fell short of market expectations. The stock slump also reflects investor concerns that Nike's business could take a hit from the deepening economic slowdown in China.

Retail sales growth in China slowed to 2.5% in July – lower than the median analyst forecast of 4%. Furthermore, the Asian nation has entered a period of deflation – where the prices of goods and services decline. That may sound like good news for consumers, but falling prices pose a danger to companies as people may postpone purchases in the hopes of further cost reductions in future.

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Nike's stock has slumped more than 13% so far this year, compared with a 14% rally in the S&P 500 index of US shares. That has cut the company's market capitalization by more than 20% this year.

And a slowdown in China isn't the only woe facing the sportswear powerhouse.

In recent months the company has come under fire from analysts for exhibiting a lack of innovation in its products. 

"There is not enough compelling new product offerings, and the old product has become stale," Williams Trading analyst Sam Poser wrote in May, pointing to the Air Max running shoes and family footwear as examples of stagnant style.

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"There is no newness coming out of Nike," said industry analyst and ARCH-USA founder Chris Burns, who wrote about "peak Nike" in May.

Meanwhile, TD Cowen analysts said that the company's over-distribution in the wholesale market – sales to other companies who sell Nike products – is also "prompting lifestyle sneaker fatigue" among consumers who already have more than enough of the shoes sitting at home.

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