Converse’s financial story for the recently ended fiscal year was far from a fairy tale.
Slumping revenue and an unclear strategy for reversing steep declines at the maker of the Chuck Taylor were hard to come by during Tuesday’s earnings call. That lack of specificity is now renewing questions around whether a sale to another company might do both Nike and Converse some good.
Analysts were told during Tuesday’s quarterly update for Nike Inc., which owns Converse, the strategy was “sharpened” in the quarter.
“[Converse is] getting clearer on the role it plays within Nike Inc. and where it will grow, especially with the Chuck Taylor and Jack Purcell franchises,” Nike Inc. President and CEO Elliott Hill told analysts Tuesday.
Oklahoma City Thunder’s Shai Gilgeous-Alexander’s departure from Converse to Nike was cited as an example of that clarity. Nabbing the athlete was no doubt a win for the Nike brand. For Converse, the move unwound work that at one time had Gilgeous-Alexander as Converse Basketball creative director.
The transition, Hill explained, was to shift Converse to “fully focus on serving creators through its lifestyle business.”
“That clarity matters,” Hill added.
That doesn’t do much in the immediate to soften the blow of the fiscal fourth quarter ended May 31. Converse delivered a 34 percent drop in revenue, excluding the impact of exchange rates, to $244 million.
The annual result for Converse was revenue of $1.2 billion, down 32 percent in constant currency.
Less Than Clear
For Nike Inc., Converse is a smaller part of the overall business. It sits in the shadow of the Beaverton, Ore.-based company’s namesake brand, which had full-year revenue of $45.2 billion. That was down 1 percent in constant currency.
Some might argue given how small a fraction Converse is to companywide revenue, its parent has time to right the smaller division.
Nike bought the maker of the Chuck Taylor nearly 23 years ago for $305 million and it wasn’t that long ago that Converse’s annual revenue was $2.4 billion. Thus, there’s money to be made if Nike is successful with the Converse business.
With so little specificity in the way of what Nike will do with Converse, outside of plucking a big name athlete to move to its larger business, it may be renewing questions of whether a sale makes sense.
Earlier in the year, there were rumblings of a sale to Authentic Brands Group, the brand management firm that owns the intellectual property to more than 50 apparel and footwear lines. That includes Guess, surfwear brands such as Quiksilver and Billabong, and Reebok.
Authentic doesn’t own inventory or run stores. Instead, it licenses that business to other companies that pay Authentic a royalty and shoulder the financial responsibilities of the day-to-day operations. Authentic’s playbook has served some brands well, such as Reebok. It could very well do something similar with Converse, which is already well known for the Chuck Taylor and Jack Purcell. Better marketing that resets Converse as part of a new trend cycle, while getting those styles onto key celebrities would help.
Still, when Hill was asked by Bloomberg in February about a Converse sale, such talk was shut down.
“Yeah, I’ve heard the chatter and I’ve received even some of the phone calls,” Hill told Bloomberg. “But, no, we’re committed to the Converse brand. We see it as an opportunity to address a different consumer than is the core consumer at Nike or the core consumer at Jordan. It’s a separate and distinct consumer and it offers us a separate and distinct opportunity from a revenue and profitability perspective.”
The differences between the consumer bases wasn’t elaborated upon then, nor were they discussed during this week’s earnings recap.
At a time where trends and lifestyles converge, it’s hard to say if the two consumer bases are all that different. Every brand needs a core consumer that defines the business and makes the product coveted to a broader bucket of shoppers, or the mainstream. Converse’s core can’t simply be “lifestyle.”
What Teens Say
Piper Sandler’s most recent Taking Stock With Teens report offers a good read on what’s coveted among the younger demographic that drives so much of the trends and sales.
When it comes to clothing brands, Nike sat in the top spot in the Fall 2025 survey of nearly 11,000 teens with an average age of 15.7. Those surveyed said they spent $2,213 annually.
Nike was also the top footwear brand in Piper Sandler’s most recent survey by a wide margin, garnering 46 percent of teens’ votes. Meanwhile, Adidas was the only other footwear brand to generate a double-digit share, with New Balance rounding out the top three. On Running and Hoka filled out the fourth and fifth, spots respectively.
Notably, Converse and Vans, a brand whose story in more recent years has been one of struggle, aren’t registering as strong among the youth. Vans’ parent VF Corp. has been working diligently to right Vans’ challenges and is farther along in the process than Nike.
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