Nike's Stock Plummets, Erasing Billions in Market Value Amid China's Economic Slowdown
Nike's stock is experiencing its longest losing streak since its IPO in 1980, falling for a ninth straight session and wiping out nearly $13 billion in market value. Concerns over China's slow consumer recovery and elevated merchandise stockpiles in the activewear industry are weighing on profitability. China's retail sales growth has decelerated, indicating a soft consumer rebound. Analysts attribute the slump to investor realization that China's growth will be slower and that the country will not do as much to boost growth as it has in the past. Nike's recent earnings report fell short of expectations, signaling the need to sell off excess inventory with discounts. The negative impact of high inventory levels and promotions on margins is a concern for investors. Foot Locker's upcoming earnings report will be an important signal for Nike, as the retailer purchases a significant portion of its athletic merchandise from Nike.