Cautious consumers and rising competition are squeezing companies’ profits.
- Nike shares fell to a 12-year low of $38.17 as investors remained cautious about its turnaround.
- Nio shares fell to a 52-week low of $4.30 ahead of its Sept. 1 earnings report.
- McDonald’s shares fell to a two-year low of $259.85 as lower-income customers cut back on restaurant visits.
Nike Inc. (NKE), Nio Inc. (NIO) and McDonald’s Corp. (MCD) each fell to fresh 52-week lows on Thursday, as investors weighed challenges ranging from restructuring costs and weak consumer spending to intense competition in China’s electric vehicle market.
Nike and Nio stocks slipped 0.3% and 0.2%, respectively, while McDonald’s stock dropped over 2%.
Nike Faces A Long Turnaround
Nike stock hit a twelve-year low of $38.17 on turnaround quotes as the sportswear giant shifts its strategy and works to rebuild relationships with wholesale retailers. On Wednesday, Truist downgraded Nike to ‘Hold’ from ‘Buy’, citing that it wants more proof that Nike’s turnaround is working and that new products can boost growth before making a stronger call on the stock.
Also, Nike has hired Jane Ewing as Executive Vice President and Chief Commercial Officer, starting Sept. 7. Ewing brings more than 20 years of global leadership experience and spent nearly 14 years at Walmart, most recently serving as Interim CEO of Sam’s Club China.
On Stocktwits, retail sentiment around the stock remained in ‘bullish’ territory.
Nio Heads Toward Earnings
Nio stock dropped to a yearly low of $4.30 as investors positioned cautiously ahead of the company’s Sept. 1 second-quarter earnings report. The Chinese EV maker continues to deliver vehicles at solid levels, but widespread discounting across China’s auto market is making profit harder to achieve.
Nio is also spending heavily on battery-swapping infrastructure and its broader brand portfolio, keeping pressure on cash flow. Analysts see Q2 revenue of ¥33.28 billion ($4.95 billion), according to Fiscal.ai data. Retail sentiment around the stock remained in ‘bullish’ territory.
McDonald’s Confronts A Value Challenge
McDonald’s stock touched over a two-year low of $259.85 as it continues to contend with financially stretched lower-income customers, who have reduced restaurant visits amid persistent inflation.
On Wednesday, Argus reduced its price target on MCD to $310 from $320 while maintaining a ‘Buy’ rating. The firm said the stock has fallen 19% in three months, but its dividend, cost-cutting efforts and plans to expand stores could support future growth.
However, retail sentiment around the stock improved to ‘extremely bullish’ from ‘bullish’ territory the previous day.
So far this year, NIO, NKE and MCD stocks have declined between 14% and 39%.
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