Nike (NKE - Get Report) still rules the market, but German rival Adidas (ADS - Get Report) is moving forward nipping at the sneaker king's heels, analyst Christopher Svezia of Wedbush told TheStreet on Thursday.

"For over 18 months, Adidas has taken market share from Nike. And to a lesser degree, Puma has too," added Svezia. Under Armour (UA - Get Report) also took market share from Nike some two years ago when the Golden State Warriors won the NBA championship and Under Armour introduced a Steph Curry sneaker, honoring Golden State's premier shooter.

In a note from Svezia on Thursday, the analyst maintained his neutral rating on Nike, saying that challenges are in foreign exchange and likely higher operating expenses that could result in "flat to down" earnings per share in 2018. 

Svezia wrote that the U.S. market remains a headwind for Nike.

"Broadly the Nike brand continues to lose share while Jordan continues to dominate in a subdued category (basketball)," he wrote. "Changes in MAP [minimal advertised pricing] have allowed retailers to promote more aggressively but could lead to continued [pressured] orders as retailers work through higher inventory levels."

Increasing the problem, wrote Svezia, is that two of Nike's biggest retailers, Foot Locker (FL - Get Report) and Dicks Sporting Goods (DKS - Get Report) have reported "softer results" in the first quarter of 2017.

The Wedbush analyst wrote that he was impressed with the company's management of expenses, but he doubted Nike could maintain it next year, and he applauded Nike for its "speed initiatives," which he noted will take time to develop.

Nike announced Thursday its Triple Double Initiative, which aims to push sales to online platforms. Nike's Triple Double Initiative plans to double innovation, speed and direct connections with consumers, the company contends.

One result of that new plan is a 2% cut of its global workforce of some 70,700 employees.

Nike hits the skids on Thursday.
Nike hits the skids on Thursday.

"This new structure aligns all of our teams toward our ultimate goal-to deliver innovation, at speed, through more direct connections," said Nike brand president Trevor Edwards in a press release.

This reorganization focuses on serving consumers in 12 key cities—New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul and Milan—in 10 countries. These key cities and countries are expected to represent over 80% of Nike's projected growth through 2020.

According to Wedbush's note, sales growth in this year's fourth quarter could be the highest in China, at 10%.

It's also part of the company's plan to deliver products more quickly to customers by creating a "local business on a global scale." According to the company, all the key cities and countries are to be supported by simpler geographic structure, changing from six to four areas that include North America; Europe, Middle East and Africa (EMEA); Greater China; and Asia Pacific and Latin America (APLA).

In a response to TheStreet by email Thursday, a Nike spokeperson wrote: "Just as Nike is prioritizing critical markets, it is placing more resources in the categories with the highest return: running, Nike basketball, Jordan brand, Nike sportswear, men's and women's training, global football and young athletes. To build on the growth of the Nike women's business, a new cross-category formation will complement each top-tier category. To put our collective power into global sport moments and groundbreaking innovations, we are unifying tennis, golf, Hurley, and Nike SB into one team."

"The future of sport will be decided by the company that obsesses the needs of the evolving consumer," said Mark Parker, Nike chairman, president and CEO in a press release. "Through the Consumer Direct Offense, we're getting even more aggressive in the digital marketplace, targeting key markets and delivering product faster than ever."

Nike shares were down 3.2% to $52.89 at Thursday's close.

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