Buying your Nike shoes online is getting a lot more expensive
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- Nike is shifting its online marketplace to a full-price model, reducing discounts.
- Revenue for Nike Direct was down 10% on a currency-neutral basis in fiscal Q3.
- CEO Elliott Hill had previously said the company planned to cut down on promotions.
Online shoppers are at the frontlines of Nike's battle against discounts.
The sportswear giant is working to reposition its online marketplace, Nike Digital, to a "full-price business," the company told investors on Thursday.
The move is in line with the promotional plans, or lack thereof, that CEO Elliott Hill has previously spoken about. Hill told investors on a Thursday earnings call that there were zero promotional days on Nike Digital in January and February for the North America region, compared to over 30 for the same period in 2024.
"We are reducing promotional days, reducing markdown rates and shifting closeout liquidation to our Nike factory stores," Matthew Friend, Nike CFO, said.
It's having an impact, though. The company said it expects digital traffic to be down double digits in fiscal 2026 as a result of the decision, though it will "gradually stabilize and grow with new product launches."
Nike reported $11.3 billion in Q3 revenue on Thursday, down 9% year-over-year. That was better than analysts' estimations for an 11% drop, Bloomberg reported. The period marked its first full quarter with Elliott Hill as CEO, who began his role in October.
While Nike has been investing in advertising and innovation, competitors like Adidas and Hoka are gaining mindshare and market share with consumers in the lifestyle and running categories.
The sportswear giant spent $1.1 billion on "demand creation," which includes brand marketing, in its most recent quarter, up 8% from this time last year. Nike aired its first Super Bowl ad in nearly 30 years during the big game on February 9.
Hill has previously spoken about Nike's plans to lean into its identity as a running brand and invest more in women’s sports. In February, it announced that it would partner with Kim Kardashian to launch NikeSkims, a new brand and a rare move for Nike to partner with an external existing company.
Nike shares were down after the bell during Thursday's investor call. The company expects Q4 gross margins to be down between 400 and 500 basis points, including restructuring charges last year, as well as the predicted impact of tariffs on China and Mexico this year.