Shares of Nike tumbled to $39.09 during Monday’s trading, marking a 4% decline and representing the stock’s weakest closing level since September 2014. The sportswear behemoth has shed approximately 78% of its value from the record high of $177.51 achieved in November 2021.
The recent selloff intensified following disappointing quarterly results from On Holding, the Swiss athletic footwear company. On posted second-quarter revenue of $1.076 billion, missing analyst expectations of $1.11 billion and sparking worries about weakening consumer appetite in the high-end athletic shoe segment.
However, Nike’s challenges extend far beyond a rival’s quarterly shortfall.
The Greater China market represents the company’s most significant headwind. Revenue from this critical region declined 11% year-over-year during fiscal 2026, reaching $5.85 billion. On a constant currency basis, the deterioration deepened to 13%. The company’s direct online channel in China experienced a severe 29% contraction, footwear sales decreased 14%, and operating profit from Greater China fell 20% to $1.28 billion.
Domestic Chinese competitors including Anta Sports and Li-Ning have steadily captured market share, while American brand prestige that once commanded premium pricing in China has eroded significantly.
Nike’s strategic emphasis on selling directly to consumers has also produced disappointing results. Nike Direct revenue contracted 6% while digital brand revenue plummeted 12%, even as traditional wholesale revenue advanced 6%. The initiative designed to enhance profit margins ultimately undermined top-line expansion.
During the complete fiscal fourth quarter, total revenue edged down roughly 1% to $11.0 billion. Digital sales experienced a sharp 26% decline, and management projects first-quarter revenue will decrease by a low to mid single-digit percentage. Profitability growth is anticipated to stagnate after temporary benefits from tariff recovery programs dissipate.
Analyst sentiment has soured considerably. JPMorgan downgraded NKE from “neutral” to “underweight” earlier this month while reducing its price objective to $40 from $47. Evercore ISI analyst Michael Binetti noted there are “no hints yet that revenues can turn positive in the foreseeable future” and suggested minimal justification exists for expanding the valuation multiple from present levels.
CEO Elliott Hill has prioritized rebuilding relationships with wholesale partners following years of pursuing an aggressive direct-to-consumer approach. He recently appointed a new CFO as part of comprehensive organizational restructuring.
In a Stocktwits survey, 68% of respondents selected Nike over Lululemon as the superior turnaround opportunity, despite both equities trading near multi-year bottoms.
The Street’s consensus 12-month price target of $50.66 implies meaningful appreciation potential from today’s trading levels. The stock currently offers a forward dividend yield of 4.03% and trades at a price-to-earnings multiple near 19.35.
Hill himself expressed exasperation during recent remarks: “I’m so tired, and I know you are too, of talking about fixing this business.”
LeBron James, who has maintained a long-standing endorsement partnership with Nike, recently commented that the company needs “to go back to its roots” to rebuild connections with grassroots communities and capture younger demographics.
Nike is scheduled to release its next quarterly earnings report on September 29, 2026.
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