Sneaker giant Nike (NYSE:NKE) is continuing to cut staff, this time at its European headquarters. The latest Nike layoffs are part of a plan to reduce the firm’s headcount by 2% overall, cutting some 1,500 positions.
Back in April, the company also filed a notice with officials that it will permanently cut positions at its Beaverton, Oregon headquarters. About 740 workers are due to be let go at the end of June.
NKE stock is trading at about $94 per share as of this writing with a market capitalization of about $142 billion. Shares of Nike are down about 12% so far this year.
Back to the Store
Nike is renewing relations with retailers like Foot Locker (NYSE:FL) and Dick’s Sporting Goods (NYSE:DKS) after years of focusing online with a direct-to-consumer strategy. CEO John Donahue called the new plan a “reinvestment with our wholesale partners.”
The company is now celebrating stores that push its latest sneakers. Nike is increasingly a lifestyle brand, making shoes specifically for breakdancing, for instance.
The company also faces new competition from firms like On Holding (NYSE:ONON), which focuses on running and athletic shoes, as well as Deckers (NYSE:DECK), which has a suite of “lifestyle brands.”
Nike is also aiming a new strategy at women and families. The firm is releasing “Girl Dad” sneakers honoring the late Kobe Bryant and his daughter. Nike also signed rising basketball star Caitlin Clark and has invested in the WNBA.
But some analysts are calling Nike faded, losing market share to more innovative rivals. The layoffs and social media blunders don’t help.
What Happens Next?
Nike is due to report earnings on June 27. For the period, analysts expect EPS of 85 cents and revenue of almost $13 billion.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
