Nike Inc.’s management team, led by Chief Executive Officer John Donahoe, is facing growing criticism from Wall Street as a prolonged sales slump sparked the stock’s biggest rout since the company went public in 1980.

The world’s largest sportswear company sees revenue declining in the mid-single digits in the company’s current fiscal year, while investors had expected an increase. That has stoked concerns about waning demand and heightened competition from upstarts On and Hoka as well as longtime rival Adidas AG. At least seven analysts tracked by Bloomberg downgraded their ratings on Nike stock following the earnings and guidance update.

“Management credibility is severely challenged, and potential for C-level regime change adds further uncertainty,” Stifel analyst Jim Duffy wrote in a research note Friday.

Nike co-founder Phil Knight reiterated his support for Donahoe, 64, in a statement. “I am optimistic in Nike’s future and John Donahoe has my unwavering confidence and full support,” Knight said, adding that he believes in the company’s plans.

The shares fell 20% on Friday, the biggest daily decline on record. The drop wiped out more than $28 billion in market value and brought the stock’s 12-month decline to 33%.

The lower guidance at Nike isn’t due to “a broader slowdown in the athletic footwear industry,” but rather “a lack of newness and proactive actions to reduce supply,” said Telsey Advisory Group analyst Cristina Fernández in a research note. She added that brands such as Adidas, Puma and New Balance are growing in the casual category where Nike is facing challenges.

Nike’s executives are “on thin ice,” said Neil Saunders, managing director at GlobalData. “The incredibly gloomy fiscal 2025 guidance has increased pressure on management significantly. Management has tried to sell a story of improvement to investors, but is not prepared to back it up with positive forecasts.”

Donahoe took over Nike in January 2020 after CEO stints at auction site eBay Inc. and cloud computing platform ServiceNow Inc. His appointment followed huge growth in Nike’s e-commerce business and signaled to Wall Street that the retailer was committed to modernizing its digital operations.

Under Donahoe, Nike took advantage of consumer shifts toward more casual footwear as the world eased out of the pandemic. Annual sales rose by almost $14 billion from fiscal 2020 to fiscal 2023, surpassing the $50 billion mark for the first time.

However, the casual segment is now under pressure. Nike executives partially attributed soft sales in the fiscal fourth quarter to weakness among its lifestyle brands, including Air Force 1 and Dunks. The category’s sales fell for the first time since the start of the pandemic.

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