NEW YORK CITY, NY / ACCESSWIRE / June 24, 2024 / Bronstein, Gewirtz & Grossman, LLC, a nationally recognized law firm, notifies investors that a class action lawsuit has been filed against NIKE, Inc. ("NIKE" or "the Company") (NYSE:NKE) and certain of its officers.
Class Definition
This lawsuit seeks to recover damages against Defendants for alleged violations of the federal securities laws on behalf of all persons and entities that purchased or otherwise acquired NIKE securities between March 19, 2021, and March 21, 2024, inclusive (the "Class Period"). Such investors are encouraged to join this case by visiting the firm's site: bgandg.com/NKE.
Case Details
According to the Complaint, NIKE is a global athletic footwear and apparel company which designs, markets, and sells products for its NIKE, Jordan, and Converse brands. NIKE branded products are sold through the Company's retail stores, NIKE Brand Digital platforms (known as "NIKE Digital"), wholesale partners, distributors, and licensees. NIKE Digital includes Nike.com and the Company's digital application, Nike+.
In 2017, notes the Complaint, NIKE began implementing its "Consumer Direct Offense" strategy. This initiative aimed to boost innovation and direct connections with consumers. It also highlighted NIKE's digital presence as a means of directly connecting with consumers by "add[ing] greater digital expertise and control in the markets where consumer connections happen." Consequently, the Company began reporting the financial metrics from NIKE Digital and the Company's retail stores as "NIKE Direct." In connection with NIKE's direct-to-consumer strategy, the Company dropped nearly one-third of its sales partners by late 2020, and significantly reduced sales to other major retail clients to shift the Company's focus to direct-to-consumer sales.
The Complaint alleges that throughout the Class Period NIKE made materially false and/or misleading statements, as well as failed to disclose material adverse facts, about the Company's business and operations. Specifically, NIKE misrepresented and/or failed to disclose that:
(1) NIKE's direct-to-consumer strategy was unable to generate sustainable revenue growth;
(2) NIKE's purported competitive advantages were unable to protect the Company from intense competitive pressures after NIKE largely disengaged from many of its wholesale and retail partners to focus on the Company's direct-to-consumer strategy; and
(3) as a result, NIKE's representations about the Company's business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis.
On March 21, 2024, per the Complaint, NIKE announced its third quarter fiscal year 2024 financial results after market close, revealing a 3% year-over-year decline in revenue in its Europe, Middle East, and Africa ("EMEA") segment, a 3% year-over-year decline in NIKE Digital revenue, and scant quarterly revenue growth of approximately 0.4% year-over-year in NIKE Direct. On the related investor earnings call held that same day, Defendant Donahoe, the Company's President and Chief Executive Officer, admitted that "NIKE is not performing [to its] potential" even though moments earlier he claimed that "Q3 performed in line with our expectations." Moreover, Defendant Donahoe revealed the Company's decision to reduce reliance on its direct-to-consumer strategy and "lean in with our wholesale partners to elevate our brand and grow the total marketplace." According to Defendant Donahoe, NIKE made a "reinvestment with our wholesale partners, so we bring a more holistic offense that grows the market and gets in the path of our consumer." Furthermore, Defendant Friend, the Company's Executive Vice President and Chief Financial Officer, revealed that NIKE was "prudently planning for revenue in the first half of the fiscal year [2025] to be down low single digits" as Defendants "shift our product portfolio toward newness and innovation." On this news, the price of NIKE Class B common stock declined $6.96 per share, or nearly 7%, from a close of $100.82 per share on March 21, 2024, to close at $93.86 per share on March 22, 2024.
Therefore, the Complaint alleges that as a result of NIKE's wrongful acts and omissions, and the decline in the market value of the Company's Class B common stock pursuant to the revelation of the fraud, investors have suffered significant damages.
What's Next?
A class action lawsuit has already been filed. If you wish to review a copy of the Complaint, you can visit the firm's site: bgandg.com/NKE or you may contact Peretz Bronstein, Esq. or his Client Relations Manager, Nathan Miller, of Bronstein, Gewirtz & Grossman, LLC at 332-239-2660. If you suffered a loss in NIKE you have until August 19, 2024, to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as lead plaintiff.
There is No Cost to You
We represent investors in class actions on a contingency fee basis. That means we will ask the court to reimburse us for out-of-pocket expenses and attorneys' fees, usually a percentage of the total recovery, only if we are successful.
Why Bronstein, Gewirtz & Grossman
Bronstein, Gewirtz & Grossman, LLC is a nationally recognized firm that represents investors in securities fraud class actions and shareholder derivative suits. Our firm has recovered hundreds of millions of dollars for investors nationwide.
Attorney advertising. Prior results do not guarantee similar outcomes.
Contact
Bronstein, Gewirtz & Grossman, LLC
Peretz Bronstein or Nathan Miller
332-239-2660 | info@bgandg.com
SOURCE: Bronstein, Gewirtz & Grossman, LLC
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