Nike Executives Accused of Misleading Investors in Class Action Lawsuit

Nike CEO, John Donahoe

Nike CEO, John Donahoe | Image: Edelman

A new lawsuit targets Nike CEO John Donahoe and CFO Matthew Friend, alleging they misled investors over the brand’s direct-to-consumer (DTC) strategy.

Filed on June 20 by Kessler Topaz Meltzer & Check, LLP, the class action suit charges both Donahoe and Friend with not revealing the truth that Nike’s DTC initiative could not maintain robust gains in revenue.

Shareholders who bought Nike class B shares from March 19, 2021, to March 21, 2024, are represented in the lawsuit.

Amid the COVID-19 crisis, Nike put forward its DTC game plan, emphasizing e-commerce endeavors and withdrawing from plenty of wholesale relationships, including those with Foot Locker, DSW, Macy’s, among others.

Subsequently, in the wake of the third-quarter earnings report of 2024, Donahoe disclosed that Nike intends to reinstate its connections with wholesale partners since the DTC model did not meet expectations.

“We know Nike is not performing at our potential,” Donahoe said in the call. “While our consumer direct acceleration strategy has driven growth and direct connections with consumers, it’s been clear that we need to make some important adjustments.”

Furthermore, the lawsuit accuses the directors of failing to admit that the company’s approach did not shield it from the severe competition that arose after Nike significantly reduced its engagement with many wholesale and retail collaborators.

This news comes in light of HOKA and On’s upper hand in the running sector, and as other competitors excel in trailblazing innovation – both fields Donahoe acknowledged the company plans to re-invest in.

Nevertheless, Donahoe ascribes the obstacle to Nike’s creative drive partially to the remote working conditions, even though other companies apparently did not encounter a similar impact on an extensive level.

Moreover, preceding the Q3 earnings briefing, Nike terminated 2% of its labor force (740 employees) in the early parts of 2024.

“In hindsight, it turns out, it’s really hard to do bold, disruptive innovation, to develop a boldly disruptive shoe on Zoom,” Donahoe said in a CNBC interview.

“Our teams came back together 18 months ago in person, and we recognize this. So we realigned our company, and over the last year we have been ruthlessly focused on rebuilding our disruptive innovation pipeline along with our iterative innovation pipeline,” he added.

The company said it expects Q4 revenue to be up in the low single digits and full-year revenue to be up 1 percent compared to the prior year.

Nike’s 2024 Q4 earnings call takes place on June 27, 2024.

  1. Sneakers Top Trends

    Official Release Date for the Jordan Tatum 3 “Zen”

    jordan-tatum-3-zen-fz6598-001-release-date-3jpg

    jordan-tatum-3-zen-fz6598-001-release-date-3jpg

    The Boston Celtics’ season is unfolding just as they had envisioned, with only one loss to report and a striking 30 points per game average from their star player, Jayson Tatum.

    After a more eventful off-season than what championship teams typically endure, Tatum and his Boston teammates have skillfully tuned out distractions, staying focused on their goal of repeating their success early in the season. In line with this theme, the upcoming #0 Jordan Tatum 3 is about to launch a “Zen” colorway that embodies this same sense of tranquility.

    The motif of serenity has been a consistent element in Jayson Tatum’s sneaker line, especially highlighted by the “Vortex” version of the Tatum 2, which explicitly connects to this theme: our previous coverage noted that the design reflects Tatum’s calm demeanor, reminiscent of the peacefulness found in a vortex above water.

    While this new model opts for a more subdued color palette, its execution remains true to that original concept; the graceful cut-outs in the upper design resemble calm waters, serving as a guiding inspiration throughout Tatum’s signature collection.

    As mentioned earlier, the Jordan Tatum 3 “Zen” is set to launch on November 14th via Nike.com, available in sizes for the whole family. The adult versions will be priced at $125.

    For a closer look at this appealing colorway, check out the official images below, and make sure to keep an eye on our Sneakers page for updates.


    Jordan Tatum 3 “Zen”

    SKU: FZ6598-001

    RETAIL PRICE: $125

    RELEASE DATE: Nov 14, 2024

    Jordan Tatum 3 “Zen” (Images via: Nike)

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    Jason Kelce’s Field Goal Attempt In Timberlands Will End In A $100,000 Donation

    This Saturday, November 2nd, Jason Kelce will take on a field goal challenge while wearing Wheat Timbs during the ESPN College GameDay broadcast of the highly anticipated Penn State vs. Ohio State matchup. The idea for this challenge originated when college student Daniel Villasenor successfully kicked a field goal in Vans checkerboard slip-ons, winning an impressive $100,000 earlier in October.

    Initially discussed on the Kelce brothers’ New Heights podcast with special guest Pat McAfee, this lighthearted challenge quickly evolved into a real event. The NFL legend, Jason Kelce, is set to attempt scoring three points while donning the famous Wheat Timberlands.

    In an exciting twist, VF Corp — the parent company of both Vans and Timberland — has stepped in with a generous $100,000 commitment to the charity Soles4Souls, aimed at supporting hurricane relief efforts. Fortunately for Jason, VF Corp has assured that the funds will be donated regardless of whether his kick is successful or not.

    Make sure to tune in to ESPN College GameDay on November 2nd, 2024, to witness this unique field goal attempt for yourself!

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  3. Sneakers Top Trends

    Notre and Vans Collaborate For the Rowley XLT “Linen”

    NOTRE-NOV-15-1200x675jpg

    NOTRE-NOV-15-1200x675jpg

    The highly anticipated Notre x Vans Rowley XLT “Linen” is set to drop on November 15, 2024, exclusively at Notre and its flagship location.

    Be sure to check HQZ’s Sneakers page to stay updated on the latest happenings and drops in the sneaker world.


    Notre x Vans Rowley XLT “Linen”

    Colorway: Linen/Silver
    Style #: VN000D1GDPB1
    Release Date: November 15, 2024
    Price: $165

    Notre x Vans Rowley XLT “Linen”

    Notre x Vans Rowley XLT “Linen” VN000D1GDPB1 (Images via: @oscar_castillo/Instagram)

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