Nike Shares Drop As Company Shifts Focus from Classics to New Styles, Impacting Revenue

Nike shares fell nearly 8% as it plans to reduce supplies of classic shoes like Air Force 1 to focus on new styles, impacting near-term revenue.

The company acknowledged its direct-to-consumer (DTC) strategy was not driving growth as expected and is looking to reengage with wholesale partners.

Sluggish demand in North America has weighed on Nike's DTC efforts. Rival Lululemon also flagged a revenue and profit hit due to soft North America demand.

Nike's forward price-to-earnings multiple is lower than rivals Adidas and Puma.

At least 12 brokerages cut their price targets on Nike stock following the results, pulling down the median target to $116 from $126.