Nike CEO John Donahoe appears to be on thin ice. 

The former top executive of eBay, who has been at the helm of Nike since January 2020, is starting to lose Wall Street’s confidence after the company capped off a lackluster fiscal year with more bad news. 

On Thursday, Nike warned that sales in its current quarter were expected to decline by a staggering 10% – far worse than the 3.2% drop LSEG had projected – after it posted its slowest annual sales gain in 14 years, excluding the Covid-19 pandemic. 

The company also said it expects fiscal 2025 sales to be down mid-single digits when it previously expected them to grow.

The warning signs led shares to close 20% lower on Friday — making it the worst trading day in the company’s history since its IPO in Dec. 1980. The plunge wiped about $28 billion off of Nike’s market cap, bringing it to just under $114 billion from $142 billion a day earlier.

As Wall Street digested the dismal outlook from the world’s largest sportswear company, at least six investment banks downgraded Nike’s stock. Analysts at Morgan Stanley and Stifel took it a step further, specifically calling the company’s management into question.

“The FY25 guide (the 5th downward consensus revision in 6 quarters), pushes prospects for growth inflection further into 2025 (perhaps FY4Q or spring ’25 at the earliest) asking investors to both underwrite success of not yet proven styles and look across an uncertain consumer discretionary backdrop into 2HCY24 until momentum could build again into 2HCY25,” wrote Stifel analyst Jim Duffy. “Management credibility is severely challenged and potential for C-level regime change adds further uncertainty.”

Since Donahoe took over as Nike’s top executive, its stock is down more than 25% as of Friday’s close, significantly underperforming both the S&P 500 and the XRT – the retail-focused ETF – which saw gains of around 67% and 66% in that time period, respectively.

Nike finance chief Matt Friend on Thursday attributed the guidance cut to a host of factors. Some, like softness in China and challenging foreign exchange headwinds, are outside of Nike’s control, but others are problems it squarely created under Donahoe’s leadership. 

The company is expecting wholesale orders to be slow as it scales new styles, pulls back on classic franchises and works to repair its relationships with key retail partners after spending the last few years cutting them off in favor of a direct-selling strategy. 

At the same time, loyal customers who shop on Nike’s website are no longer springing for new pairs of Air Force 1s, Air Jordan 1s or Dunks, the company’s core franchises. Critics say the sneaker lines have dominated the retailer’s offerings for too long and turned customers away as they sought fresh styles and innovative designs from a slew of upstart competitors. 

That’s left Nike to win back some of its most essential customers – runners. As the retailer focused on its direct-selling strategy at the expense of innovation, scrappy competitors like On Running and Hoka snatched up market share.

“It was almost silly towards the end of the call they talked about running being such a key sport that consumers are taking part in. … We’ve known that for a long time, we’ve known that the consumer changed their mind post-pandemic, how they’re much more active,” Jessica Ramírez, senior research analyst at Jane Hali & Associates, told CNBC, adding a management change at Nike is “quite needed.” 

“Post-lockdown, we saw that the consumer did adopt running and was serious about that and there was an everyday runner, and Nike didn’t really respond to that,” she said. “I think when you have management missing key consumer shifts, there’s a problem with your company … something changed and they’ve missed the mark.”

Kevin McCarthy, a senior research analyst at Neuberger Berman, told CNBC’s Scott Wapner on Thursday that the company needs a change in management and speculated that Donahoe’s employment contract could soon expire. 

“Everything that you’ve suggested is wrong with this company seems to flow back to execution, management and everything else,” McCarthy said on CNBC’s “Closing Bell.”

“They’ve got a couple internal candidates right now that are very capable … you’ve got a couple ex-Nike candidates, too, that have been in the discussion, and then you also have other competitors that have been discussed. But I do think that it’s assumed that the leadership of this company will be changing over the next six months.” 

In fairness to Donahoe, the Covid-19 pandemic started in earnest in the U.S. less than two months into his tenure, and he’s had to grapple with shuttered stores, remote workers and a roller-coaster ride of shifting consumer preferences and abilities. 

While the company’s stock may be down, Nike’s annual sales have grown some 37% under his leadership from $37.4 billion in fiscal 2020 to $51.36 billion in fiscal 2024. 

If you ask Phil Knight, Nike’s founder and its chairman emeritus, Donahoe is doing just fine. 

“I have seen Nike’s plans for the future and wholeheartedly believe in them,” the 86-year-old told CNBC in a statement. “I am optimistic in Nike’s future and John Donahoe has my unwavering confidence and full support.”