Nike’s stock has taken a nosedive following an unforeseen projection of a decrease in annual sales, raising concerns among investors about the company’s struggle to combat market share losses to emerging brands like On and Hoka.

It was a catastrophic day for the stock as it tumbled by 20 percent, erasing a massive $28.41 billion from the company’s market capitalization.

On Thursday, Nike forecasted a mid-single-digit percentage decrease in revenue for fiscal 2025, contrasting analysts’ expectations of a nearly 1 percent increase.

The company's cautious outlook impacted the stock prices of competitors and sportswear retailers in Europe, the UK, and the US.

JD Sports, a British sportswear retailer, saw a 5.4 percent drop in its stock, while Puma from Germany experienced a 1 percent decline. Adidas witnessed a marginal increase in its shares.

Over the years, Nike's market share in the US sports footwear category has faced a decline, dropping to 34.97 percent in 2023 from 35.37 percent in 2022.

Meanwhile, other sports brands like Hoka, Asics, New Balance, and On have collectively gained market share, accounting for 35 percent of the global market in 2023, according to a recent report.

To reverse the sales slump, Nike has been restructuring by phasing out certain oversupplied brands and introducing new affordable sneakers worldwide and sustainable products like Air Max and Pegasus 41.

Moreover, there are speculations within the industry about a potential management overhaul at Nike in light of the company's recent performance.

Despite the challenges, analysts believe in Nike's long-term viability but emphasize the importance of effective management execution going forward.

CEO John Donahoe's leadership and strategic initiatives are under scrutiny as analysts and brokerages adjust their recommendations and price targets based on recent developments.