12:46 PM EDT, 04/30/2024 (MT Newswires) -- Nike's ( NKE ) recent challenges stem from the loss of talent as a combination of layoffs and voluntary departures hurt morale, productivity and near-term performance, Wedbush said Tuesday in a report, citing an interview with Peter Orcutt, who worked at the footwear company for 24 years.

The company lacks any near-term catalyst for product innovation, and despite new releases, is missing a "groundbreaking" release for the Olympics in three months, Wedbush said.

Orcutt, a senior leader who left in a major round of layoffs in early 2020, said that the company pursued a direct-to-consumer strategy too aggressively, which damaged its wholesale partnerships and pushed retailers to seek alternatives, the Wedbush report said.

Nike ( NKE ) rival Adidas is gaining ground, and early views of Adidas's 2025 products impressed industry insiders, Orcutt said, according to the Wedbush report.

"There are several key challenges that the company must work through," Wedbush said. Partly because "one of the best long-term track records of success," the outlook remains favorable, the report said.

Wedbush reiterated its outperform rating on Nike's ( NKE ) stock and kept the price target at $115.

Shares of Nike ( NKE ) fell 1.1% in recent trading Tuesday.

Price: 93.05, Change: -1.01, Percent Change: -1.07