Bragar Eagel & Squire, PC announces that a

NEW YORK, June 23, 2024 (GLOBE NEWSWIRE) — Bragar Eagel & Squire, PC, a nationally recognized shareholder rights law firm, announces that a class action lawsuit has been filed against NIKE, Inc. (“NIKE” or the “Company”) (NYSE: NKE) in the U.S. District Court for the District of Oregon on behalf of all persons and entities who purchased or otherwise acquired NIKE securities between March 19, 2021 and March 21, 2024, both dates inclusive (the “Class Period”). Investors have until August 19, 2024 to request that the Court appoint them as lead plaintiff in the lawsuit.

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The class action lawsuit begins on March 19, 2021 in connection with the announcement of NIKE’s third quarter fiscal 2021 financial results and related investor conference call. In connection with these results, Defendant John J. Donahoe II (the Company’s President and Chief Executive Officer) announced that “NIKE continues to connect closely with consumers around the world thanks to our strong competitive advantages” and that “our strategy is working as we accelerate innovation and create the seamless premium marketplace of the future.” Defendant Matthew Friend (the Company’s Executive Vice President and Chief Financial Officer) also assured investors that “NIKE’s brand momentum is as strong as ever and we are driving targeted growth around our greatest opportunities.” On the related investor conference call, Defendant Donahoe emphasized NIKE’s “tremendous success in the digital space” and that “NIKE’s digital transformation continues to provide a unique advantage.”

The lawsuit alleges that investors learned the truth about NIKE’s inability to achieve sustainable revenue growth on June 27, 2022, when the company announced its fourth quarter and full-year 2022 financial results after the market closed. NIKE announced that quarterly revenue declined 1% year-over-year and quarterly wholesale revenue declined 7% year-over-year. However, defendant Donahoe reassured investors that NIKE’s “strategy is working” by creating value through its “competitive advantages, including (its) pipeline of innovative products and expansion of digital leadership.” He further claimed that NIKE’s investments in digital and other areas led defendants to be “very confident in our long-term strategy and growth prospects.” On this news, the price of NIKE’s Class B common stock decreased $7.72 per share, or nearly 7%, from a closing price of $110.50 per share on June 27, 2022 to $102.78 per share on June 28, 2022.

Three months later, on September 29, 2022, investors learned more when NIKE reported its financial results for the first quarter of fiscal 2023 after the market closed. Despite modest revenue growth, NIKE reported a 22% year-over-year decline in net income and a similar 20% year-over-year decline in diluted earnings per share. NIKE also reported a significant decline in gross margin (down 220 basis points year-over-year) due to the disposal of excess inventory – which was 44% higher than in the first quarter of 2022. On this news, the price of NIKE’s Class B common stock declined $12.21 per share, or nearly 13%, from a closing price of $95.33 per share on September 29, 2022 to $83.12 per share on September 30, 2022.

Despite the company’s difficulties with NIKE Direct and its direct-to-consumer sales strategy, the defendants continued to tout the supposed strength of NIKE’s business model over the following year, telling investors that “NIKE’s competitive advantages continue to fuel our momentum” and that NIKE was ready to “leverage our competitive advantages to not only gain market share, but also grow the market.”

However, on December 21, 2023, investors learned more about the competitive pressures facing NIKE when the company released its second quarter fiscal 2024 financial results and held its related earnings call for investors after the market closed. Defendant Friend admitted that NIKE’s “total retail sales across the market fell short of our expectations” and that NIKE’s digital platforms lost customer traffic to competitors due to “higher promotional activity across the market.” In light of these challenges, Defendant Friend announced that NIKE is “adjusting its channel growth plans for the remainder of the year” and “identifying opportunities companywide to achieve up to $2 billion in cumulative cost savings over the next three years.” Following this news, the price of NIKE’s Class B common stock declined $14.49 per share, or nearly 12%, from a closing price of $122.53 per share on December 21, 2023, to $108.04 per share on December 22, 2023.

Finally, on March 21, 2024, after the market closed, NIKE announced its financial results for the third quarter of fiscal 2024. They reported a 3% year-over-year decline in revenue in its Europe, Middle East and Africa segment, a 3% year-over-year decline in NIKE Digital revenue, and a modest 0.4% year-over-year growth in NIKE Direct revenue. On the corresponding conference call with investors on the same day, Defendant Donahoe admitted that “NIKE is not fully reaching its potential,” despite having claimed shortly before that “the third quarter was in line with our expectations.” In addition, Defendant Donahoe announced the Company’s decision to reduce reliance on its direct sales strategy and “work with our wholesale partners to elevate our brand and grow the overall market.” According to Defendant Donahoe, NIKE “has made a reinvestment with our wholesale partners so that we are launching a more holistic offensive that grows the market and gets in the way of our consumers.” In addition, Defendant Friend disclosed that NIKE “prudently plans to decrease revenue in the low single digits for the first half of fiscal year (2025)” as Defendants “shift their product portfolio toward novelty and innovation.” As a result of this news, the price of NIKE’s Class B common stock declined $6.96 per share, or nearly 7%, from a closing price of $100.82 per share on March 21, 2024, to $93.86 per share on March 22, 2024.

If you purchased or otherwise acquired NIKE stock and suffered a loss, are a long-term shareholder, have information, would like to learn more about these claims, or have any questions about this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Marion Passmore by email at [email protected], by phone at (212) 355-4648, or by completing this contact form. There is no cost or obligation to you.

About Bragar Eagel & Squire, PC:

Bragar Eagel & Squire, PC is a nationally recognized law firm with offices in New York, California and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivatives and other complex litigation in state and federal courts across the country. For more information about the firm, visit www.bespc.com. Attorney Advertising. Past results do not guarantee similar results.

Contact information:

Bragar Eagle & Squire, PC
Brandon Walker, Esq.
Marion Passmore, Esq.
(212) 355-4648
[email protected]
www.bespc.com