runstyle

By Bob McGee N ike CFO Matt Friend made a big acknowledgement about the brand's running business during the company's first quarter earnings conference call on Oct. 1. He stated that the Swoosh began losing market share in the running specialty channel four years ago in 2020 and subsequently reduced its engagement with the segment. Published data speaks to how the running business has tilted away from the industry behemoth, starting in 2020, and moved toward sector stalwarts in Brooks and Asics and the "upstarts" Hoka and On in recent years. Nike's global running sales slipped 14.7 percent in 2020 to $3.83 billion, according to its annual report, only to recover by 4.1 percent the following year at $3.99 billion. Since 2021, the company has not broken out running segment results in the annual filing. Consider that during the same five-year period, Hoka's annual revenues rose from $185.1 million in 2019 to nearly $1.13 billion in parent Deckers Brands' FY24. Similarly, On's sales (when converted to U.S. dollars from the reported Swiss franc) have moved from $268.7 million in 2019 to $2.0 billion in 2023. "While we've seen tremendous success at the top of the pyramid with innovation with innovation at marathons and on the track, we haven't made as much progress with everyday runners," Friend admitted to analysts. "And that's where our team's focus and attention has been over the past year." e company's efforts appear to be paying off, even though the sales momentum of rivals shows no signs of abating. Nike's North American run specialty business was said to be up "double digits," and Friend added the order books for holiday and Spring 2025 indicate that the momentum will be sustained throughout next year as the brand introduces new looks and innovations into the segment that will include a "refreshed lineup" of performance running apparel. But Nike's rediscovered attention on the run segment comes as other running brands are ascending in the category. Hoka, whose H1 sales rose 32 percent for the six months ended Sep. 30, exceeded the $2 billion sales threshold over the trailing 12 months and successfully cracked the $200 retail price point. As it benefits from door distribution expansion with key partners, Hoka is putting energy behind its new Skyflow and Mach X2 styles and getting its international awareness and growth up to speed with its U.S. business. Over at Brooks Running, the Berkshire Hathaway-owned brand surpassed $1 billion in global revenues for the nine months ended Sep. 30 and maintained its top spot in the U.S. specialty footwear retail segment. North American sales rose 10 percent year-over-year in the third quarter as the region's e-commerce channel revenues expanded by 16 percent. e Seattle-based company recorded more than 22 percent footwear revenue growth in the U.S. specialty retail channel in September, outpacing the overall market that increased by 7.9 percent. And Brooks, whose key styles include the Ghost, Glycerin and Adrenaline GTS, is also experiencing momentum outside the U.S. ird quarter sales grew more than 30 percent in Asia-Pacific and by 10 percent in the EMEA where direct e-commerce sales improved by 24 percent for the three months. n NIKE AIMS TO RECAPTURE MOMENTUM STARTING LINE / NEWS & ANALYSIS 6 runstyle Fall 2024 runstylemag.com Nike's new Zoom Fly 6 is a racing and training hybrid. Year Nike Running Hoka On* 2019 $4.49 billion $185.1 million $268.7 million 2020 $3.83 billion $277.1 million $453.8 million 2021 $3.99 billion $405.2 million $734.7 million 2022 no breakout $628.7 million $1.28 billion 2023 no breakout $925.9 million $2.0 billion 2024 no breakout $1.13 billion HOW NIKE STACKS UP IN RUNNING (Annual Global Sales) *Converted to US$ from CHF at average conversion rate for year.

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