Nike’s Jordan Brand Is in Need of a ‘Reset’ TD Cowen Analyst Says
Nike’s once red-hot Jordan Brand could be losing its cool.
In the last five years, Jordan Brand has more than doubled its top-line growth, going from $3.14 billion in sales in 2019 to $6.99 billion in fiscal 2024, according to a Monday note led by TD Cowen managing director John Kernan.
That represents a five year CAGR of 17 percent, which is more than triple the growth of the Nike brand in the same time. However, according to Kernan, data from third party resale sites like StockX and GOAT show that Jordan’s brand heat appears to be “waning.”
“There is Jordan retro fatigue along with the other over distributed franchises that Nike management is currently involved in managing these down through marketplace,” Kernan wrote. On StockX, for example, Kernan noted that about 1,000 Jordan SKUs were “selling below their retail price as of October 31, 2024.” This oversupply was also evident on GOAT.
“We would prefer to see the brand elevated with more premium distribution and price points,” Kernan wrote about Jordan Brand.
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The same issue has plagued franchises across Nike Inc. more generally. To address this decline in demand for Nike and Jordan products, Nike has recently set out to reduce the presence of its popular franchises — such as the Air Force 1, Air Jordan 1 and Dunk — to realign demand.
As such, Kernan expects Jordan sales to decline in fiscal year 2025 compared to the prior year as management reduces distribution of its classics. Jordan is expected to account for 12.8 percent of Nike’s total sales in fiscal year 2025, compared to 13.6 percent the prior year, Kernan noted.
In 2024, men’s and women’s basketball products drove Jordan Brand growth, which was offset by declines in lifestyle franchises. The brand gained share in APAC thanks to strong activations in Tokyo and Manila. Jordan Brand also saw growth from its expansion into golf, football and soccer.
Outside of Jordan Brand, Nike has also focused on bolstering its product innovation cycle to win back mindshare from competitors. In Piper Sandler’s 48th semi-annual “Taking Stock With Teens” survey, the Nike still ranked number one in top clothing brands (33 percent) and top footwear brands (57 percent). But, in footwear, Nike shed 4 points year-over-year, down from 61 percent of teens choosing the brand as their top shoe pick in fall 2023.
“Nike has ceded share in run specialty, tennis and more recently in lifestyle, while smaller competitors, such as Hoka, On, Asics and Saucony continue to perform well in both lifestyle and performance running,” Kernan wrote. “The view is that the Nike brand looks ‘tired,’ has had execution missteps related to its marketplace management, and recent product launches in footwear and also within apparel are not scaling.”
In early October, Nike offered mixed results in its first quarter earnings and withdrew its guidance for the fiscal year 2025. By brand, Nike brand revenues were down 10 percent to $11.1 billion in Q1, driven by declines across all geographies. Converse brand sales declined 15 percent to $501 million. By channel, Nike direct revenues were down 13 percent to $4.7 billion. Wholesale was down 8 percent to $6.4 billion.
