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Friday, February 23, 2024
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Nike Loses Jokić, but Posts Earnings, Income Increases

  • Reigning NBA Finals MVP shifts to Chinese brand 361 Degrees.
  • Nike reports a decent set of quarterly financials, but outlines $2B in cost-cutting.
USA TODAY Sports

One of the NBA’s best players is parting ways with Nike—and he’s not alone.

Denver Nuggets center and 2023 NBA Finals MVP Nikola Jokić has left the sports footwear and apparel giant in favor of a multiyear deal with Chinese brand 361 Degrees. Jokić, who is expected to serve as a global face of the upstart brand, took the court Wednesday night for a game against the Toronto Raptors wearing 361 Degrees’ Big3 Future High shoes. 

Jokić’s teammate, Aaron Gordon, is already aligned with 361 Degrees. The move also parallels the rise of fellow Chinese brand Anta Sports, which in recent months has signed NBA stars such as Kyrie Irving and Donte DiVincenzo, who join other endorsers such as Klay Thompson. Irving and Thompson are also former Nike endorsers.

The Jokić-Nike split isn’t altogether surprising, as the brand never gave him a signature shoe despite his winning two league MVP awards, the Finals MVP, and an NBA title.

Nike Earnings

Despite the various basketball defections, Nike reported a 1% increase in fiscal second-quarter revenues to $13.4 billion and a 19% rise in net income to $1.58 billion. Given the larger sales and earnings challenges in the category and Nike missing Wall Street’s projections in the prior quarter, the latest results represent something of a win for the company.

“Our Q2 results demonstrated how we are getting back on our front foot in our key areas of innovation and growth,” said Nike president and CEO John Donahoe. 

But Nike’s road ahead is likely to still be rocky. The company said in its earnings report that it is looking to reduce $2 billion in costs over the next three years, with staff cuts and a simplified product mix among the targeted areas. To that end, Nike is already projecting pre-tax restructuring charges of $400 million to $450 million in next quarter, largely associated with employee severance costs. 

Nike shares dropped nearly 5% in after-hours trading, wiping out the stock’s gain for the year to date. 

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