Shelly Banjo is a Bloomberg Gadfly columnist covering industrial companies and conglomerates. She previously was a reporter at Quartz and the Wall Street Journal.

The jeers being directed at Nike are getting louder.

Analysts at Bank of America Merrill Lynch downgraded the athletic-gear maker's stock on Monday to a "sell" from "hold," citing market-share losses to Adidas AG and Under Armour Inc., which have been nipping at Nike Inc.'s heels with new products and aggressive marketing.

Recent meetings with some of Nike's largest Asian manufacturers suggest the sportswear giant's pipeline of new, innovative products has dried up, at least through 2017, the analysts wrote. And one of Nike's biggest factories, Pou Chen, has said it's looking to diversify its customers beyond Nike. 

The rating change stands out because Wall Street rarely dings blue-chip companies like Nike with a "sell" rating. In fact, since 1997, Nike has never had more than one "sell" rating on its stock at a given time. And that happened in only 29 out of 216 months of consensus analyst ratings Bloomberg has collected.

Hard Sell
In the past 18 years, Nike has never had more than one "sell" rating at any given time
Source: Bloomberg
Note: Data based on the percentage of Wall Street analysts followed by Bloomberg with buy, sell or hold ratings on NIke

Back in March, I argued Nike's dominance would come under attack as Under Armour, Adidas and Lululemon Athletica Inc. competed more aggressively. In June, as CEO Mark Parker pretty much ignored Nike's slowing sales growth -- not to mention Adidas's return to relevance --  I urged Nike to take its competition more seriously

But the sportswear giant hasn't changed its tack. Nike's sales came in lower than Wall Street expected in the latest quarter. And growth in North American futures orders -- a mechanism that lets retailers order Nike goods several months in advance of delivery -- slowed for the fourth straight quarter, a sign of dwindling demand for its products.

Futures growth in China, which had soared as Nike invested heavily in the country, also started showing signs of weakness. Together, North America and China account for about two thirds of Nike's total revenue. 

Instead of addressing the futures shortfalls on its earnings call last month, Nike dismissed the metric's value, taking the old "lies, damned lies, and statistics" approach. In fact, Nike said it would no longer include futures growth -- which investors have long used to gauge the company's progress -- in its quarterly earnings releases. 

The Future Looks Meh
Growth is slowing in Nike's futures orders, which let retailers order goods several months in advance of delivery; these are often used as a measure of future demand
Source: BofA Merrill Lynch Global Research, Company Data

Meanwhile, Nike's shares have sunk 23 percent in the past year. The last time Nike's stock fell for more than four consecutive quarters was back in 1984. 

Falling Behind
Nike shares have sunk 23% in the past year, the longest streak of quarterly stock declines since 1984
Source: Bloomberg

And for good reason. At $32 billion in annual revenue -- more than the sales of Adidas, Lululemon, Under Armour, and Foot Locker Inc. combined -- Nike is the undisputed leader in athletic apparel and footwear. But Nike has gotten too comfortable in the role, and competitors that started small (i.e. Lululemon and Under Armour) have started to aggressively steal its sales.

As the so-called athleisure trend tapers off, consumers are switching out of their running and basketball sneakers in favor of more casual styles, such as the Stan Smith and Old Skool lines of Adidas and Vans, respectively. 

And as its cheaper rivals gain prominence, Nike is finding it harder to raise prices on its shoes, a tactic it had tried successfully in the past when it didn't have any new or exciting styles to woo shoppers. Further pressuring margins is Nike's shift to sell more of its goods online -- a smart move, but one that comes with consequences for profits. 

Nike might not be able to do much about the profit pressures or increased competition. But it can acknowledge that sales are slipping and that it needs a plan to fix its problems, whether that's accelerating new products or moving more aggressively to sign endorsements and keep talented people from going to competitors. Otherwise, it could watch a temporary losing spell morph into an all-out upset.

-- With assistance from Tara Lachapelle 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Shelly Banjo in New York at

To contact the editor responsible for this story:
Mark Gongloff at