Japan's Asics is being credited with leading a "running renaissance" in the global athletic footwear market, while Nike, the world's largest sportswear maker, has suffered the indignity of being dropped from the Standard & Poor's 100 index for the first time in 18 years. Asics lifted earnings by concentrating on its core business, while Nike focused on marketing without innovation and lost favor in China, one of its key markets.
Nike will be removed from the S&P 100 before the opening of the New York market on the 21st, according to S&P Dow Jones Indices on the 7th. Nike had been a member of the index continuously since December 2008. Its shares closed at $38.40 as of the 4th, down 78.4% from a record high of $177.51 set in November 2021.
Nike's slump traces back to its failure in the Chinese market. China once accounted for nearly 20% of Nike's annual revenue but now makes up about 13%. Chinese consumers have abandoned Nike in large numbers in recent years as cheaper domestic brands such as Anta and Li-Ning rode a wave of "guochao," or patriotic consumption. Demand for premium sportswear, meanwhile, shifted to Asics as well as On and Hoka, brands that gained traction in Silicon Valley. As a result, Nike's share of the global footwear market fell to 22.9% last year from 25.9% in 2022.
The direct-to-consumer strategy pursued under former Chief Executive John Donahoe also proved to be a misstep. Sporting goods retailers, angered by the shift, filled their shelves with newer brands such as On and Hoka instead of Nike products. Nike's reliance on marketing that repackaged classic models such as the Air Jordan and Air Max as limited editions in new colorways, and its emphasis on politically correct messaging rather than the functional performance at the heart of sport, are also cited as missteps.
Asics, by contrast, said it expects annual revenue for 2026 of 1.05 trillion yen (about 9.18 trillion won), up 29% from a year earlier. It would be the first time the company's annual revenue has topped 1 trillion yen. Net profit is projected at 120 billion yen (about 1.04 trillion won), up 22% from a year earlier and revised up from an earlier forecast of 110 billion yen.
Asics took the top spot by concentrating on the premium running shoe market. In the combined premium running shoe market covering the United States, five European countries and Japan, Asics held a 17.4% share in the January-September period last year, ranking first for the first time, according to research firm Circana Group. In the annual running shoe rankings released last year by the exercise tracking service Strava, the Asics Novablast took first place, pushing the Nike Pegasus into second.
That marks a sharp contrast with 2021, when no runner at the Hakone Ekiden, Japan's flagship relay marathon, wore Asics shoes and the company was dismissed even in its home market as a brand for older men.
Asics has long had the engineering credentials to be chosen by professional athletes in events such as the marathon. The company drew attention in 1986 when it introduced the world's first silicone-based gel running shoe for shock absorption. Its recent decision to focus on that engineering strength amid a global running boom is seen as the force behind its rebound. Yasuhito Hirota, Asics chairman and chief executive, said the company benefited from "pouring resources into technology development, managing profits rigorously and withdrawing from low-margin businesses." Asics indeed exited non-core lines such as baseball and concentrated on running shoes. In the 2020s it won praise for a succession of next-generation high-rebound foams, including FF Blast and FF Turbo. The company has sponsored running clubs around the world and released an app that lets users join clubs and track personal records.
The Y2K revival also played a part. The retro feel of the Gel-Kayano series, launched in 1993, drew attention in the fashion world in the 2020s and became hugely popular. Separately from the main Asics line, the premium positioning of design-focused sub-brand Onitsuka Tiger is also seen as having worked.
Nike has been working to repair relations with retailers and roll out new products since Elliott Hill became chief executive in October 2024. Brian Mulberry, senior market strategist at Zacks Investment Management, said improving wholesale relationships and supply chains "will not happen overnight" and that a meaningful rebound is likely to take another three to four quarters.
