How Footwear Companies Are Changing

Why It Matters

Nike’s missteps threaten its market dominance, and its turnaround will dictate the competitive dynamics and investment outlook for the entire premium footwear sector.

Key Takeaways

• Nike's sales fell 8% despite beating earnings expectations.
• Over‑reliance on direct‑to‑consumer hurt Nike's wholesale presence significantly.
• Emerging brands On and Hoka grew >30% in recent quarters.
• New CEO Elliott Hill aims to revive innovation and sport focus.
• Crocs' Jibbitz personalization drives high margins and sales growth.

Summary

The video examines how the footwear landscape is reshaping, focusing on Nike’s recent earnings miss, the surge of niche runners like On and Hoka, and Crocs’ unexpected comeback through personalization. It outlines Nike’s 8% sales decline, its aggressive shift to a direct‑to‑consumer model, and the resulting loss of shelf space and relevance in the running category, while competitors captured market share with premium, high‑margin products priced above $160.

Key data points include Nike’s $28 billion market‑cap erosion after a 20% share plunge, On and Hoka’s >30% quarterly revenue growth, and Crocs’ Jibbitz accessories contributing $271 million—about 8% of 2024 sales. The analysis highlights the company’s over‑rotation away from wholesale, the under‑investment in running‑specific innovation, and the strategic missteps that allowed rivals to out‑perform.

Notable examples feature the Hoka Clifton Nine as the summer’s hottest trainer, Elliott Hill’s rise from intern to CEO with a mandate to refocus on sport‑centric product pipelines, and Crocs’ Jibbitz strategy that boosts transaction size by up to 20% while delivering 60% margins on sub‑$100 footwear. The video also cites Nike’s massive R&D and marketing budgets as enduring competitive advantages, provided they are deployed effectively.

The implications are clear: Nike must rebalance its wholesale relationships, accelerate genuine product innovation, and leverage its brand storytelling to reclaim relevance. Investors should watch how Hill’s turnaround plan—clearing excess inventory, re‑engaging retailers, and re‑centering athletes—affects top‑line growth and whether emerging brands can sustain their momentum against the industry titan.

Original Description

CNBC Marathon digs into how the footwear market is evolving as retailers like Nike and Crocs stage a comeback amid new retail industry entrants like On Running.

Nike is the world’s largest sportswear brand but the company is on a mission to regain its stride. A series of poor earnings reports eventually wiped out $28 billion from the company’s market cap. In June 2024, the company experienced its worst trading day ever as a publicly traded company. Nike has blamed its performance on everything from macro challenges to remote employees, but analysts say it was part of a years-long series of strategic errors. During an effort to focus on direct-to-consumer sales through digital channels, analysts say the company has started to lack innovation and ceded market share to newer rivals like Hoka and On Running. Nike is now dealing with an excess of inventory from major sales slowdowns as consumers turn to newer styles from other brands. Now, all eyes are the company’s new CEO, 32-year Nike veteran Elliott Hill, to turn the sportswear giant around.

After having a big moment in U.S. culture during the early 2000s, Crocs' growth fell flat over the decade following the Great Recession. However, clever marketing and brand messaging focusing on customization with its charms, Jibbitz, has made the iconic clog 'cool' again. In 2024, the company that also includes casual footwear brand, HeyDude, sold over $4 billion of product.

Nike and Adidas have long dominated the global sportswear market, but a Swiss sneaker company is quickly gaining ground. The brand On sells premium priced athletic wear and is most known for its trademark running sneakers with hollow pads in the sole. In its Q1 2025 earnings report, the company reported net sales of $869 million, over 40% higher from the year prior. Meanwhile, Nike reported a 9% revenue decline in its fiscal Q3 2025 earnings report, compared to the same quarter last year. Nike still owns around 40% of global market share in athletic footwear, and On makes up a little under 3%, but that share has increased eightfold since 2019. Experts say On is now one of the biggest challengers in sportswear. But with Nike mounting a comeback and potential tariffs looming, can the Swiss brand maintain its edge? CNBC visited On’s headquarters in Zurich, Switzerland to get a behind-the-scenes look at the company and how its shoes are made.

The U.S. retail landscape is changing and footwear is a key part of the sector. This CNBC Marathon digs into the details of Nike’s turnaround plan, how Crocs won back shoppers and what makes On Running one of the biggest challengers in sportswear.

Produced by: Merritt Enright, Ryan Baker

Edited by: Andrea Miller, Darren Geeter

Camera by: Natalie Rice

Animation: Jason Reginato, Mithra Krishnan

Additional Reporting: Sara Eisen, Gabrielle Fonrouge

Senior Managing Producer: Tala Hadavi

Senior Director of Video: Jeniece Pettitt

Additional Footage: Getty Images, Reuters, AP Images, Crocs, On, Nike

00:00 Introduction

01:23 Why Nike Is Struggling

11:30 How Crocs Became Cool Again

21:45 How On Running Shoes Is Taking On Nike And Adidas

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How Footwear Companies Are Changing