You’ve heard it on the Street — and seen it in the streets. Young consumers are increasingly opting for New Balance sneakers or Adidas Sambas, according to Stifel Financial. That could be the latest hit to struggling Nike shares, according to the investment bank. Nike still reigns supreme and carries the most popular shoe with its Dunk, said analyst Jim Duffy. But he said other areas of Nike’s shoe business are eroding — and chipping away at its market share. Meanwhile, competitors offering bold alternatives are seeing momentum. Stifel’s back-to-school survey shows “consumers embracing newness across a range of trends and increasing popularity of challenger brands,” Duffy wrote in a report earlier this week. “The result is one of the most fresh, colorful, and exciting back-to-school product lineups at multi-branded retail in years.” Specifically, he said two styles of shoes are gaining traction, including brands and styles that consumers will likely recognize on the street. The first is the “dad” shoe, which encompasses brands like New Balance and Asics. Nike’s Vomero 5 also falls into this category. The other is a “terrace” shoe, with Duffy pointing to Adidas’ Samba, Gazelle and Campus lines. Samba has gained particular pop culture relevance, being spotted on the feet of everyone from pop star Olivia Rodrigo to former UK Prime Minister Rishi Sunak. While Vomero gains in popularity, however, Duffy said several of Nike’s court styles, such as the Air Force 1, Jordan 1 and Blazer, are falling out of favor. Loss of interest in these staples is concerning, Duffy said, given that they have been a “foundation” for Nike’s “dominance.” Other Jordan shoes, as well as the Air Max 270 and Vapor Max, are also fading, Duffy said. Stifel’s survey shows just how much Nike is sliding. “Style references” for Nike at six retail chains, while still the largest share, have tumbled to 88.2% in the current back-to-school season from 61.4% in 2023. New Balance shot to 15.5% from 7.7% when comparing the same two periods. Adidas jumped to 13.6% from just 0.5%. As a result, Duffy is “proactively” cutting earnings estimates for Nike’s North America business. He said these trends have led to questions whether Nike can see percentage growth for revenue in the middle single digits in the 2025 fiscal year, or if revenue will turn around in the fiscal fourth quarter. Duffy also cut his price target on the stock by $9 to $79. That implies a 6.3% downside from where the stock finished Monday. Struggles during this closely-watched shopping season could be the latest blow for floundering Nike shares. The stock has tumbled more than 21% in 2024, putting the athletic retailer on pace for its third straight losing year. NKE YTD mountain Nike, year to date That has made Nike the third worst performer in the Dow Jones Industrial Average for 2024, behind only Intel and Boeing . Still, Duffy is harsher than the majority of Wall Street. While Duffy has a hold rating, the most popular rating from analysts polled by LSEG is a buy. What’s more, the average price target implies Nike shares can bounce more than 7% over the next year.
