👟 Nike’s plan to make Jordans cool again

It’s been a rough few years for Nike, and so far its comeback plans haven’t managed to get sales growing again. Its next act: rethinking Jordan. 

The brand accounted for 13% of Nike’s global business last quarter, but revenue fell by the mid-teens. On a call with analysts on Thursday, CEO Elliott Hill offered a pretty straightforward diagnosis: “Simply put, we've been oversupplying our iconic retro product, asking them to do too much.”

The company will reduce the volume and frequency of specific Jordan retro launches. If this sounds familiar, that’s because it is: Nike faced a similar problem with Jordan nearly a decade ago, after ramping up production left too many sneakers sitting on shelves. Its solution then was the same as it is now: make fewer shoes and create a “pull market” where consumers chase rare shoes. 

“When consumers see the Jumpman, it should feel special,” Hill said. “It should feel earned. And every decision we're making is designed to ensure the Jordan Brand remains as coveted a decade from now as it has been for the past several decades”

The revamp comes as the company reported quarterly financials that disappointed investors. On Thursday, Nike reported: 

• Quarterly earnings per share at $0.48, more than the $0.43 analysts were expecting. 

• But also reported $11.2 billion in sales for the quarter, less than the 11.3 billion expected, and about a 4% decline year over year. Nike said it expects sales to decline by “high-single digits” in the fiscal year. 

The company’s biggest sales decline is in China, where revenue plunged 26% year over year. The company’s gloomy guidance “assumes that China actually gets worse from a revenue perspective for the balance of this year,” CFO Dave Denton told analysts.

“Correcting these issues will take time and an inflection back to sales growth is now not likely until calendar 2028, at the earliest,” analysts at Telsey Group wrote in a Friday note.

The Takeaway:

Over the past few years, Nike has battled with a medley of issues: 

tariffs on imported goods, a “cautious” consumer, and increasing competition from footwear upstarts like Hoka and On, as well as old competitors like New Balance and Adidas. 

Now, Nike is dusting off an old Jordan trick: restrict supply, rebuild the hype and make shoppers chase the Jumpman again.

— J. Edward Moreno

• 🏈 NFL: Tonight the Atlanta Falcons take on the New Orleans Saints, with New Orleans the 57% favorite to win against their divisional rival.

• 📊 Election: With less than five weeks to go until the midterms, markets are now pricing in a 91% chance that Democrats win the House of Representatives, and a 63% chance that Democrats win the Senate. 

*Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.

That’s how many nonfarm, seasonally-adjusted jobs were added to the US economy in September, according to the Bureau of Labor Statistics’ most recent reading released Friday, coming in significantly below the 84,000 economists were penciling in. The unemployment rate rose to 4.2%.