Stock price plummeted 23%! What happened to Nike?

Peg stock price plummeted 23% to $76, returning to the lowest level during the pandemic. Investors had high hopes for the new CEO Elliott Hill, hoping he could turn around the sluggish stock price, but even though Peg's financial report this year showed a surplus, the brand's aging and the rapid changes in the overall environment have made investors lose confidence in this once the world's number one sports brand.

Performance leader, brand image unable to find a new positioning

What comes to mind when you think of Peg? A checkmark symbol or "Just Do It"? Although "Just Do It" has become a joke for many people, this slogan is still impressive. Peg's new CEO Elliott Hill joined Peg in 1988 as an intern and has held 19 different positions. He retired with honors in 2020 and was appointed as CEO by Peg again in 2024. The veteran's return has indeed brought a small improvement in Peg's performance. Peg's fourth-quarter financial report this year showed a slight increase from $51.2 billion to $51.4 billion compared to last year, but this small growth has obviously not convinced investors. In the past, Peg spent a lot of money on advertising, with endorsers including basketball star Jordan and tennis legend Federer, and actively opened stores globally, with Peg's advertisements everywhere, overshadowing all other sports brands. However, Nothing sad than being an old brand, facing the rising performance and brand image of newcomers Hoka and On Running, as well as the European classic brand Adidas, how will Peg position its brand in the future? The new CEO Elliott Hill seems to have many blind spots. Even old white man Trump had to pull a middle-aged white man Vans as his running mate to avoid being mocked as a senile old man like the sleeping Biden, but Peg doesn't seem to have grasped the trend of the world, especially when Federer's nemesis Nadal, who is 10 years younger, has already retired, Peg still can't grasp the key points.

The affected Peg Stories

Peg has spent a lot of time having advertising companies write stories, connecting the brand to the "successful athlete" look, emphasizing "winning" victories, and extensively promoting the stories of disabled athletes and pregnant women who still exercise diligently, which looks affected and exaggerated. Young consumers are no longer interested in this kind of inspirational story, and Peg's stories can no longer attract the new generation of consumers.

The brand is aging and entering a period of decline

BMO market analyst believes that Peg is unable to promote its own official website, and does not believe that managers can hold Zoom online meetings to drive business growth, and use physical store sales figures as the KPI indicator, becoming more and more distant from consumers. Even though 60% of Peg's revenue comes from retail stores, many stores like Footlucker, a low-priced shoe store, have spoiled consumers' appetites and engaged in price competition, and the profits may not necessarily grow. Peg has long been obedient to retail stores and has not kept up with the changing times of online consumption. With no success in direct online sales, and no profit space in retail store performance, Peg has repeatedly changed its business strategy, resulting in no outstanding performance on both physical retail stores and direct online operations. Students who have learned advertising all know that every brand will age, and sports brands in particular need vitality to drive brand image. If Peg does not rethink its brand positioning and business strategy, it may become a brand forgotten by the young generation and fade into history along with the older generation.