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A former college soccer player who has emerged as a leading California critic of transgender participation in women’s sports is bringing her fight to Nike — backing a shareholder measure as investors scrutinize corporate ties to groups that support gender-transition care for minors.

Sophia Lorey, 26, was set to address Nike shareholders Tuesday on behalf of a proposal from Christian investment firm Inspire Investing that calls for greater scrutiny of the sneaker giant’s charitable partnerships.

The Vanguard University alum was expected to focus on Nike’s relationship with the Human Rights Campaign, arguing that the company’s support for the LGBTQ advocacy organization clashes with its marketing of women’s athletics, according to Bloomberg, which obtained a recording of her planned remarks.

Sophia Lorey, a former Vanguard University soccer player and outreach director for the California Family Council, has been tapped to speak in support of an investor proposal at Nike’s annual meeting Tuesday. Instagram/@sophiaslorey The Nike vote is part of a wider pressure campaign by Inspire, which manages $5.4 billion and has been questioning scores of major corporations about their policies on transgender issues.

The investment firm and its allies have contacted 242 employers seeking information about whether their health insurance plans pay for gender-related surgeries for minors, Bloomberg reported.

That campaign is separate from the Nike proxy measure backed by Lorey, a proposal that focuses on potential risks stemming from the company’s charitable giving.

Lorey was set to invoke Nike campaigns including “Play Like a Girl” and “Get Her in the Game” while challenging the sports giant’s association with groups that support transgender women competing in women’s fields, according to Bloomberg.

The shareholder proposal cites an Equal Employment Opportunity Commission investigation involving allegations of systemic race discrimination at Nike.

Former college soccer player Sophia Lorey has become a prominent advocate against allowing transgender athletes to compete in girls’ and women’s sports. Vimeo/Inspire

Nike is urging shareholders to reject a proposal calling for greater scrutiny of risks associated with the sneaker giant’s charitable partnerships. SOPA Images/LightRocket via Getty Images “Given the EEOC’s current high-profile investigation into Nike over ‘systemic race discrimination allegations’ occurring partially as a result of the company’s diversity, equity, and inclusion initiatives, investors are right to be concerned about what further brand politicization could do to company performance,” the proposal states.

Nike has told shareholders to reject the measure, maintaining that another examination of its charitable relationships would duplicate safeguards already in place.

“Charitable partnerships are approved … only after a robust due diligence review of the proposed recipient organization,” Nike’s board said in a regulatory filing cited by Bloomberg.

Sophia Lorey (center) is seen in front of the Supreme Court Building in Washington, D.C., in a photo posted to Instagram on Jan. 14, 2026. Instagram/@sophiaslorey Lorey brings an athletic background to the campaign.

The 5-foot-4 defender played women’s soccer at Vanguard from 2018 through 2021 and majored in business administration, according to university records. Vanguard competed in the NAIA during her career.

She joined the California Family Council as outreach director in 2022 and has since become a prominent advocate against transgender athletes competing in girls’ and women’s sports.

Her advocacy has also extended into schools. In July, a podcast she co-hosts promoted a campaign helping parents seek exemptions for their children from what the program called “gender ideology lessons, CRT, DEI programming” and other curriculum conflicting with their religious beliefs.

Meanwhile, Inspire has broadened its corporate campaign with backing from investors that collectively oversee more than $100 billion, according to the firm’s director of corporate engagement, Tim Schwarzenberger.

The 242 companies approached by the coalition were identified partly through the Human Rights Campaign’s Corporate Equality Index, Bloomberg reported. Inspire is seeking disclosures about their insurance coverage and other policies involving transgender issues.

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“We feel that this is an important topic, there’s regulatory, legal and financial risks,” Schwarzenberger told Bloomberg. “We think shareholders have a right to know, have a right to transparency.”

According to Inspire, Walmart told the group that its plans do not pay for gender surgeries for minors. Charles Schwab told the group it previously offered such coverage but had stopped, Bloomberg reported. Neither company commented to the outlet.

Nike has become the latest target of a conservative investor campaign scrutinizing corporate policies involving transgender issues. Getty Images The Human Rights Campaign has pushed back against the campaign, arguing that conservative shareholder initiatives targeting diversity and LGBTQ policies have failed to attract significant support from investors.

“There is no question that extraordinary political and legal pressure has made some companies less willing to publicly document their LGBTQ+ workplace practices,” HRC senior vice president Jonathan Lovitz told Bloomberg.

“But less disclosure doesn’t mean … that they have actually changed practices internally,” he added.

The Post has sought comment from Nike.

Nike is set to lose its place in the S&P 100 after nearly 18 years, highlighting the extent of the sportswear giant’s decline as a prolonged growth slowdown and intensifying competition weigh on its market value.

S&P Dow Jones Indices will remove Nike from the index effective September 21 as part of its quarterly rebalancing.

Honeywell Aerospace, Simon Property Group and Colgate-Palmolive will also be removed.

Dell Technologies, Palo Alto Networks, Arista Networks and SanDisk will move up from the S&P 500 to fill the four vacancies, increasing the technology sector’s representation in the S&P 100.

Nike will remain in the broader S&P 500, but its removal from the S&P 100 underscores how dramatically its market position has changed in recent years.

Nike’s market capitalization now stands at roughly $57 billion after a prolonged selloff.

Shares closed at $38.40 on Friday, September 4, about 50% below their 52-week high of $76.97 and their lowest level in roughly 12 years.

The stock has fallen 39.3% this year and 48.2% over the past 12 months.

From its record closing level of $179.10 reached on November 5, 2021, Nike has lost nearly 80%, wiping out roughly $230 billion in market value.

The decline has pushed Nike from the ranks of the largest and most valuable US companies, even though it remains one of the world’s biggest sportswear brands.

The deterioration has also been reflected in the company’s financial performance.

Nike’s revenue declined from $51.2 billion in fiscal 2023 to $46.4 billion in fiscal 2026, while its operating margin fell from 15.6% in fiscal 2021 to 8.2% in fiscal 2026.

Nike’s most recent quarterly results offered some signs of resilience, but the company’s outlook continued to weigh on investor sentiment.

The company reported fiscal fourth-quarter adjusted earnings of 20 cents per share, excluding a 52-cent benefit related to the expected recovery of import tariffs.

Revenue fell 1.1% year over year to $11 billion.

Both figures came in slightly ahead of Wall Street expectations.

Analysts surveyed by LSEG had expected earnings of 13 cents per share on revenue of $10.9 billion.

However, investors focused more heavily on what comes next.

Nike expects sales to continue declining through the first half of fiscal 2027 as it contends with tariff pressures, geopolitical uncertainty and cautious consumer spending.

The company now expects revenue to decline by low- to mid-single digits between March and November, compared with its previous forecast for a low-single-digit decline.

Earnings are also expected to remain broadly flat over the same period.

The revised outlook has made it difficult for investors to determine when Nike’s prolonged downturn might finally bottom out.

China remains a major problem for NikeOne of the biggest challenges is Nike’s performance in China, where the company has struggled to maintain its previous momentum.

Nike’s business in the country has declined for eight consecutive quarters, while its overall China operation has contracted by roughly 30% since 2021.

Annual revenue in the market reached an eight-year low at the end of May, marking a sharp reversal for a region that was once one of Nike’s most important growth engines.

The weakness has coincided with stronger competition from brands such as On, Hoka and New Balance, particularly in performance footwear.

Nike has also struggled to reignite growth in its footwear business, while weakness in its direct-to-consumer operations has added another challenge.

The combination has left the company attempting to rebuild demand while protecting profitability at a time when consumers remain selective.

CEO Elliott Hill has said Nike is focused on rebuilding the foundations of the business through product innovation, brand strength, marketplace execution and cost efficiency.

The company’s ability to execute that turnaround will be crucial as investors look for evidence that the years-long decline can be reversed.

Nike remains profitable and continues to generate substantial cash, despite the pressure on revenue and margins.

It returned about $2.5 billion to shareholders in fiscal 2026, including $2.4 billion in dividends and $123 million in share buybacks.

However, the S&P 100 removal serves as a reminder that Nike’s scale alone is no longer enough to shield it from changing market dynamics.

The company now faces the challenge of proving that its brand can once again translate into sustained growth, particularly in performance footwear and China.

For investors, the sharp decline in Nike’s valuation could eventually create an opportunity if Hill’s turnaround strategy succeeds.

But with revenue still falling, margins under pressure and management expecting further declines ahead, the company has yet to demonstrate that its recovery has reached a decisive turning point.

Nike (NKE +0.76%) stock is down 78% from its 2021 all-time high -- the steepest drop in the company's history. Sales remain under pressure, and there's no clear catalyst for a near-term rebound.

But margins are stabilizing -- a sign that things are moving in Nike's favor as it continues its turnaround. If profitability continues to firm up and sales eventually recover, this could set up a rare chance to buy the world's leading footwear and sports apparel brand at a value price.

Image source: The Motley Fool.

Stabilizing margins Nike's financials are messy. In fiscal 2026 (which ended in May), sales fell 1% year over year. A company with $46 billion in annual revenue isn't going to flip back to strong growth overnight. That's why investors should focus on early signals that the turnaround is working, such as gross margin performance.

In its latest reporting period (the fourth quarter of its fiscal 2026), Nike's cost of sales fell 16% year over year. That supported the gross margin, which improved to 49.2% from 40.3% in the year-ago quarter. It further drove a 21% increase in gross profit despite the decline in sales.

While that jump was tied to a tariff refund, the underlying trend is still improving. Excluding the refund, gross margin was 40.2% -- down just 10 basis points from the prior quarter and better than management's expectation for a 25- to 75-basis-point decline.

Management now expects gross margin to expand beginning in the first quarter of fiscal 2027 (ending in August). That's earlier than planned and points to structural cost improvements coming through in the supply chain.

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Why the stock is a buy Management still expects revenue to fall in the low- to mid-single-digit range this quarter. But part of that reflects a deliberate shift: pulling back on discounts and leaning harder into full-price sales. That can weigh on near-term revenue momentum while strengthening margins and earnings power.

Also, fiscal 2026's headline decline masks momentum in key categories like running. That suggests the issue isn't the brand -- it's the product mix. Nike's running category has now posted five straight quarters of double-digit growth, helping drive market-share gains across Western Europe and North America.

Nike shares trade at 23 times fiscal 2027 earnings estimates. That looks fair, but it also understates how inexpensive the stock could be if earnings rebound. Analysts expect earnings to reach $2.71 billion by fiscal 2029, which implies a cheaper forward multiple of 14 on those future earnings.

Nike still has to execute to get there. But the push toward supply chain efficiency and higher full-price sales lays the groundwork for stronger long-term profitability. This won't be a smooth turnaround, but the stock is priced low enough that if Nike simply meets consensus estimates from here, patient investors could see some upside.

There is a downside to the current consensus estimates for Nike Inc (NYSE:NKE) for fiscal 2027 earnings, according to JPMorgan.

• Nike stock is showing downward bias. What’s the outlook for NKE shares?

The Nike Analyst: Analyst Matthew Boss reiterated an Underweight rating on the stock.

The Nike Thesis: The company is likely to generate earnings of $1.55 per share in fiscal 2027 versus consensus of $1.72 per share, with revenues expected to decline sequentially in the second quarter and back half of the year, Boss said in the note.

Check out other analyst stock ratings.

He noted the following takeaways from recent channel checks:

Greater China Headwinds: Partners Pou Sheng and Topsports initiated early inventory clearance in July, ahead of the termination of online sales distribution on Jan. 1, 2027. This cutoff represents an annualized revenue headwind of more than $1 billion. North America & EMEA (Europe, the Middle East, and Africa) Promotions: Elevated inventory in legacy lifestyle silhouettes and apparel is fueling aggressive discounting through the Holiday quarter. Weak consumer sentiment and delayed Back-to-School demand hurt retail partners. The analyst further stated that there are two key themes to monitor:

Rising Competition: Market share is fragmenting as "ankle biter" brands have grown to around 17% market share combined, eroding Nike’s market lead. Consumers increasingly favor specialized performance brands over single mega-brands. "To us, the central question is no longer whether niche brands can grow, but whether consumer behavior has structurally shifted toward lower brand loyalty and higher multi-brand trial, making share recapture a harder, more durable challenge," Boss wrote.

Market Maturation: Global sportswear growth is slowing from +6.2% pre-pandemic to an expected +4.5% in fiscal 25-28. Wallet penetration has reached around 24%, tightening further category growth. The analyst expects Nike’s revenue to contract 5.9% year-on-year in the second quarter versus Street expectations of a 4.4% decline, and by 4.6% year-on-year in the second half of fiscal 2027, nearly 500 basis points below consensus of flat growth.

NKE Price Action: Shares of Nike declined by 0.88% to $39.25 at the time of publication on Monday.

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Key Takeaways NIKE's Running business has posted five straight quarters of double-digit growth.Refreshed Pegasus, Vomero and Structure franchises are driving performance-focused product momentum.Running gained five points of market share in key regions, while Lifestyle franchises are under pressure. NIKE, Inc.’s (NKE - Free Report) Running business has emerged as a key spot as its product-led turnaround gains momentum. The company is strengthening its Running portfolio by refreshing key franchises such as Pegasus, Vomero and Structure, with products designed to address specific runner needs, including cushioning, stability and energy return. The company is also broadening its lineup across various price points while accelerating the introduction of performance-focused products.

NIKE’s greater emphasis on performance-led innovation has accelerated Running growth, signaling strong consumer acceptance of its new product offerings. NKE has posted five consecutive quarters of double-digit Running growth, adding approximately $1 billion to the business in fiscal 2026. It has also captured around five percentage points of market share in statement Running footwear across North America and Western Europe, highlighting the growing impact of its renewed focus on performance-driven innovation and its ability to win back consumers.

The momentum is not limited to North America and Western Europe. Running also grew mid-single digits in Greater China in the fourth quarter, despite the broader market remaining under significant pressure. In China, NIKE said the Pegasus 42 launch performed well across roughly 2,000 elevated doors, while Running and Global Football were among the stronger areas of the business. In EMEA and APLA, Running also delivered double-digit growth, demonstrating that the category is gaining traction across multiple regions. The improvement is being driven by a sharper product strategy.

In short, NIKE’s Running business has emerged as a key spot in its turnaround, demonstrating that its renewed emphasis on sport, innovation and athlete-focused products is beginning to gain traction. The category’s strong performance provides early evidence that the company’s Sport Offense strategy is working, particularly when it combines consumer insights, differentiated product innovation and a sharper focus on performance needs.

However, the company’s Lifestyle business remains under pressure, particularly across established franchises such as Air Force 1, Dunk and Air Jordan. Sportswear and Jordan Streetwear continue to face challenges from weak sell-through and cautious consumer spending. While Running alone cannot fully offset the weakness in Lifestyle, its strong performance demonstrates that NIKE can reignite consumer demand through product innovation and performance-led offerings rather than relying primarily on established lifestyle franchises.

NKE’s Peerslululemon athletica inc. (LULU - Free Report) is putting greater emphasis on product newness, technical performance and innovation. LULU has been specifically increasing the frequency and breadth of new styles while maintaining its premium positioning. lululemon is leveraging its innovation platform and expanding beyond traditional yoga and core categories into areas such as running, training, tennis, golf, hiking and footwear.

adidas AG’s (ADDYY - Free Report) innovation strategy is centered on athlete-led product development, advanced technologies, local consumer insights and a combination of performance innovation with lifestyle appeal. adidas is pursuing a broad-based growth strategy centered on product innovation, performance and lifestyle relevance. ADDYY is strengthening key performance categories such as Running, Football and Training through new technologies and athlete-focused products, while simultaneously refreshing its Lifestyle portfolio.

NKE’S Price Performance, Valuation and EstimatesShares of NIKE have lost 34.5% in the past six months compared with the industry’s decline of 29.9%.

Image Source: Zacks Investment Research

From a valuation standpoint, NKE trades at a forward price-to-earnings ratio of 21.69X compared with the industry’s average of 19X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for NKE’s fiscal 2027 and fiscal 2028 earnings implies year-over-year growth of 10.1% and 34.5%, respectively. The company’s EPS estimate for fiscal 2027 has been stable while that of fiscal 2028 has moved south in the past 30 days.

Image Source: Zacks Investment Research

Nike's (NKE +1.37%) forward (12-month) dividend yield is 4% -- well above Coca-Cola's 2.4%. This is notable given Coke's status as a Dividend King, a label reserved for companies that have raised their dividends for 50-plus straight years.

Nike's elevated yield reflects a lower share price despite the company continuing to pay a steady quarterly dividend. Instead of being priced in, the market might be undervaluing the stock ahead of a successful turnaround.

Nike's latest results still showed revenue declines, yet the underlying story is getting more constructive. If management executes, an improvement in margins and recovery in profitability could drive meaningful upside over the next several years.

Image source: The Motley Fool.

Why Nike's dividend looks sustainable High yields often show up when investors expect limited growth -- which is why mature, dominant businesses with less runway, including many Dividend Kings, tend to pay above-average yields. Those stocks are typically bought for income first, not for market-beating appreciation.

Nike's yield is high mainly because the stock is down, not because the company can't afford the payout. The company recently declared a $0.41 dividend, payable Oct. 1 to shareholders of record Sept. 1, putting the annualized dividend at $1.64 per share.

Although the payout ratio is elevated, Nike still generates sufficient cash to support its quarterly dividend, especially given the expected rebound in fiscal 2027. Nike's trailing 12-month free cash flow of $2.2 billion was less than its $2.4 billion in dividend distributions over the same period. But analysts expect free cash flow to rebound to $3 billion in fiscal 2027, consistent with positive trends management is beginning to see in margin stabilization.

If cash generation improves as management focuses on cleaning up inventory, the dividend becomes easier to support -- and the stock has room to move higher. Unlike Coke, Nike can offer both income and real upside.

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Why Nike's turnaround is hitting an inflection point Full-year sales were essentially flat at about $46 billion (down 2% on a currency-neutral basis). Still, Nike's latest earnings report included signals of improving fundamentals.

Demand remains softest in lifestyle categories (sportswear and Jordan streetwear), which still represent roughly half of sales. But performance wear is holding up better -- and that matters because it's the core of Nike's brand.

Nike Running is the standout, producing five straight quarters of double-digit growth. Management also pointed to better retail trends in training and global football. Strength in these categories suggests Nike is winning where it historically wins best -- performance products -- and that healthier growth can return as the company fixes inventory levels and leans harder into its strongest franchises.

Valuation helps the investment case. Nike trades at about 1.3x sales, well below its historical norm of 2.0x or higher. If Nike cleans up inventory, improves sales mix, and expands margins, investors could reward it with a higher multiple.

The turnaround path will likely stay bumpy in a cautious consumer environment. But between the high yield and the discounted price-to-sales ratio, the market doesn't appear to be fully pricing in a successful turnaround -- and that could offer investors meaningful upside potential.

Nike (NYSE:NKE | NKE Price Prediction) trades at $39.09, while Wall Street’s average price target sits at $50.66, an implied upside of roughly 30%.

Nike is the world’s largest athletic footwear company and one of the most contentious names in consumer discretionary. CEO Elliott Hill’s Win Now turnaround is grinding into a second year, and shares reflect the frustration. Bernstein’s Aneesha Sherman and Nick Anderson carry a $72 target, implying roughly 84% upside. That gap between price and the most bullish coverage is the real story.

A Year That Erased Nearly Half the Stock Nike is down 47.81% over the trailing 12 months. Shares have slid 37.68% year to date and another 7.17% in the past week alone.

The Q1 FY27 report crystallized the problem. Nike beat EPS by 465%, but a $986 million one-time IEEPA tariff recovery added $0.52 per share. Strip it out and EPS was $0.20. Revenue fell 1% year over year, Greater China dropped 17% currency-neutral, and Converse collapsed roughly 32%.

Insiders piled on. From mid-June through early August, CFO Matt Friend, President Amy Montagne, and three other senior executives sold across 13 disclosed transactions in the $41 to $46 range. Open-market executive purchases were zero.

The $72 Bull Case Bernstein Is Not Backing Off Bernstein’s thesis rests on three ideas: Nike is scaling back over-distributed “Classics” like Air Force 1 and Dunk to clear channel inventory, painful but necessary; gross margins should recover before revenue does as promotional clearance winds down; and performance running and basketball continue to grow across major regions while lifestyle transitions.

Management partially supports the view. Running has posted five consecutive quarters of double-digit growth, adding roughly $1 billion in FY26 and gaining 5 market share points in statement footwear across Western Europe and North America. Q1 FY27 gross margin hit 49.2%, up 890 basis points, though the tariff recovery accounted for most of the lift. CFO Matt Friend now expects gross margin expansion to begin in Q1 FY27, earlier than prior guidance.

Coverage is largely on the sidelines: 1 Strong Buy, 11 Buy, 25 Hold, 1 Sell, and 1 Strong Sell. Bernstein’s $72 sits well above the $50.66 consensus. Hill has said Win Now will sunset by the end of calendar 2026, with Investor Day on November 16 to 17 setting a 12 to 18 month window for the thesis to inflect.

The Footwear Group Fell Together, Nike Fell Deepest The athletic footwear peer group sold off broadly over the past year. Nike is the deepest decliner.

Lululemon (NASDAQ:LULU) trades at $115.74 against a $127.92 target for about 10.5% upside. Shares are down 41.68% over one year on Americas comp weakness. Coverage skews to 1 Buy, 29 Hold, 3 Sell, 1 Strong Sell.

On Holding (NYSE:ONON) trades at $31.31 against a $45.40 target, roughly 45% upside. Down 30.94% over a year despite Q2 revenue growth of 13.5% and gross margin of 65.4%. Coverage skews bullish at 6 Strong Buy, 18 Buy, 3 Hold, 1 Sell.

Deckers (NYSE:DECK) trades at $90.11 against a $122.81 target, roughly 36% upside. HOKA keeps growing double-digits and management raised FY27 EPS guidance. Coverage runs 5 Strong Buy, 8 Buy, 11 Hold, 2 Sell. Down just 12.48% over a year, DECK fell least.

On consensus targets alone, ONON leads the group with 45% implied upside. Only Bernstein’s $72 Nike call sits above it.

What the Consensus Actually Says Nike currently trades at $39.09 with a $50.66 consensus target and roughly 30% implied upside, drawn from 39 analyst ratings.

Shares are down 47.81% over the trailing year and 37.68% year to date. The S&P 500 is up 20.08% and 13.31% over those windows.

Nike trades at 19 trailing P/E and 23 forward P/E with a 3.95% dividend yield. Bernstein’s $72 implies 84% upside if the turnaround inflects.

The Investment Case The bull thesis holds if running momentum, the World Cup activation, and the Sport Offense reorganization stabilize NIKE Direct and Greater China over the next two quarters. The bear thesis strengthens if Converse’s collapse widens, China accelerates lower, and underlying ex-tariff revenue keeps sliding.

Bull case: management delivers margin expansion in Q1 FY27, the $18 billion buyback retires shares at depressed prices, and Investor Day reframes the growth story.

Bear case: eight straight EPS beats mean little when net income leans on tariff recoveries, China is falling faster than management concedes, and insider selling clusters into every rally.

Bernstein’s $72 requires a lot to break right. At $39 with a fortress balance sheet, a 4% yield, and running actually growing, the setup tilts toward a slow rebuild over a value trap.

Contact [email protected] for any questions or corrections.

Key Takeaways NIKE is refocusing on athlete-led innovation and performance products to rebuild consumer demand.NIKE is using platforms such as NIKE MIND, Liquid Air Max and AeroFit to create differentiated products.NIKE is resetting its Greater China strategy with localized products, stronger partnerships and approaches. NIKE, Inc. (NKE - Free Report) is showing encouraging signs that product innovation is helping win back consumers, particularly in performance footwear and apparel. The company is refocusing its product strategy on athlete-led innovation, performance and differentiated technology as it seeks to reignite consumer demand. It is using insights from its proprietary technologies and advanced manufacturing to develop products that address specific athlete needs.

NIKE has shifted its focus back toward athlete-centered innovation and performance products under its “Sport Offense” strategy. The company has introduced platforms such as NIKE MIND, Liquid Air Max and AeroFit, using proprietary research and technology to create differentiated products.

The company is investing in advanced tools and capabilities to improve the speed, precision and reliability of its product creation and manufacturing processes. These investments span Air manufacturing, materials innovation, product planning and supply-chain execution, with the goal of better serving athletes while improving profitability. The focus is on becoming more premium, culturally relevant and responsive to local consumers, while creating seamless experiences across digital and physical retail channels.

In Greater China, NIKE is undertaking a comprehensive reset centered on sport and innovation. The company is taking a more localized approach to product creation and building a territory-level strategy designed to better reflect Chinese consumer preferences. It is also revamping its marketplace strategy by strengthening partnerships and exploring new approaches to accelerate growth and improve consumer engagement.

Although the progress is still underway, continued product innovation, stronger marketplace execution and deeper cultural relevance could help NIKE rebuild consumer demand and drive sustainable long-term growth.

NKE’s Peerslululemon athletica inc. (LULU - Free Report) is focused on driving sustainable growth through international expansion, product innovation and a stronger omnichannel presence. LULU is reenergizing its product engine by increasing the frequency and breadth of new styles, improving speed to market and focusing on technical performance and newness. lululemon is leveraging its innovation platform and expanding beyond traditional yoga and core categories into areas such as running, training, tennis, golf, hiking and footwear.

adidas AG (ADDYY - Free Report) is focused on enhancing profitability and competitiveness by maintaining inventory discipline, improving operational efficiency and advancing its strategic efforts. ADDYY’s innovation strategy is centered on athlete-led product development, advanced technologies, local consumer insights and a combination of performance innovation with lifestyle appeal. adidas aims to continuously launch innovative products that enhance athletic performance, resonate with evolving consumer trends and strengthen the brand’s cultural relevance and appeal.

NKE’S Price Performance, Valuation and EstimatesShares of NIKE have lost 36.9% in the past six months compared with the industry’s decline of 31.4%.

Image Source: Zacks Investment Research

From a valuation standpoint, NKE trades at a forward price-to-earnings ratio of 21.8X compared with the industry’s average of 19.3X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for NKE’s fiscal 2027 and fiscal 2028 earnings implies year-over-year growth of 10.1% and 34.5%, respectively. The company’s EPS estimate for fiscal 2027 and fiscal 2028 has moved south in the past 30 days.

NIKE stock currently carries a Zacks Rank #4 (Sell).

Image Source: Zacks Investment Research

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Nike Inc (NYSE:NKE, XETRA:NKE) shares fell 4.3% Monday to their lowest level since September 2014, extending a decline that has now wiped out more than $200 billion in market value since the stock's 2021 record high, a drop of 78%.

Soft direct-to-consumer sales and a fresh analyst downgrade weighed on the stock as it hovered near multi-year lows. Analysts project revenue will stay muted next quarter as the company continues working through a structural reset of its retail business.

UBS said secondary-market prices for Nike and Jordan footwear weakened year-over-year in July, citing new UBS Evidence Lab data. Nike brand shoe prices in the secondary sneaker market fell 2.9% y/y in July, the third straight month of decline and a roughly 120-basis-point deterioration from a 1.7% decrease in June. Jordan brand prices fell 2.8% y/y in July, an 480-basis-point deterioration from 2.0% growth in June.

UBS called the data "a modest negative" for Nike, noting the company still has considerable work ahead to restore sustainable sales growth and meaningful margin expansion, while the market continues to price in a solid turnaround.

UBS said secondary-market data serves as a reasonably good proxy for brand momentum, and that Nike's stock is likely to improve once investors gain confidence the company's growth rate has bottomed and visibility emerges into a return to sustainably positive growth. July's data did not show that inflection, the bank said, as Nike's decline deepened and Jordan moved back into negative territory.

Key Takeaways NIKE is improving logistics, inventory positioning and forecasting to better match regional demand.NIKE is tightening buys, reducing future sell-in and adjusting order books using weekly sell-through trends.NIKE expects supply-chain actions to improve margins in fiscal 2027 as inventory control gets healthier. NIKE, Inc. (NKE - Free Report) is enhancing its global logistics and supply-chain operations to improve the speed and efficiency of product distribution across international markets. The company is optimizing inventory positioning, distribution capabilities and demand forecasting to better match product availability with regional consumer demand.

The company is working to optimize the movement of products from manufacturing locations to distribution centers, retail stores and consumers, enabling it to respond more quickly to changing demand across different regions. Such efforts are helping NIKE reduce excess inventory, improve product availability and strengthen its ability to respond to the changing market trends.

NIKE has taken steps to simplify and accelerate its supply chain, including reducing the number of facilities, adjusting its workforce and changing how products move from factories to retail. The company is tightening buys, reducing future sell-in and adjusting order books based on weekly sell-through trends. This is intended to prevent excess inventory and create a healthier, more full-price business. Management expects these actions to improve margins in fiscal 2027.

NIKE’s logistics improvements appear to be working operationally, particularly through better inventory control, lower discounting and more efficient product flows. But the financial payoff is still developing, as international sales remain under pressure. Better inventory planning and product allocation should enable NIKE to place the right products in the markets where demand is strongest, improving product availability while limiting excess inventory and markdowns. Over time, more efficient logistics and supply-chain management could lower operating costs, improve full-price sales and strengthen revenue growth and profitability across international markets.

NKE’s Competitionlululemon athletica inc. (LULU - Free Report) is focused on driving sustainable growth through international expansion, product innovation and a stronger omnichannel presence. The company continues to expand its store network in key markets, particularly China, while adapting its products and marketing strategies to local consumer preferences. LULU is enhancing its supply-chain capabilities, improving inventory management and pursuing productivity initiatives to support operational efficiency and protect profitability.

adidas AG (ADDYY - Free Report) is focused on enhancing profitability and competitiveness by maintaining inventory discipline, improving operational efficiency and advancing its other strategic efforts. ADDYY’s global distribution network, regional sourcing and integrated wholesale, localized market strategies, retail and e-commerce operations, appear encouraging. adidas’ ability to respond quickly to local market demand can improve inventory placement, strengthen supply-chain agility and accelerate delivery times across key markets.

NKE’S Price Performance, Valuation and EstimatesShares of NIKE have lost 32% in the past six months compared with the industry’s decline of 26.8%.

Image Source: Zacks Investment Research

From a valuation standpoint, NKE trades at a forward price-to-earnings ratio of 22.47X compared with the industry’s average of 19.67X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for NKE’s fiscal 2027 and fiscal 2028 earnings implies year-over-year growth of 10.1% and 34.5%, respectively. The company’s EPS estimate for fiscal 2027 and fiscal 2028 has moved south in the past 30 days.

Image Source: Zacks Investment Research

Key Takeaways NIKE is expanding innovation across running, training, basketball and football to strengthen portfolio.Sport-led marketing, athlete engagement and wholesale partnerships are central to its turnaround.Management expects performance momentum to gradually revive Sportswear and Jordan businesses. NIKE, Inc. (NKE - Free Report) is sharpening its focus on performance-driven products as it looks to reignite sales growth and strengthen its competitive position. The company is accelerating innovation across key categories such as running, training, basketball, football and outdoor, while introducing new silhouettes, refreshing its product portfolio and strengthening its presence in performance-led wholesale channels.

NIKE is doubling down on performance products as it executes its turnaround strategy and seeks to restore sustainable growth. Management is also prioritizing sport-focused marketing and deeper engagement with athletes to reinforce the brand's competitive edge. Through innovations in such categories, along with a more disciplined product pipeline and renewed emphasis on athletic performance, the company aims to attract consumers and reduce its reliance on lifestyle offerings.

Under its Sport Offense operating model, NIKE is accelerating innovation across key performance categories, while intensifying sport-led marketing and deepening engagement with athletes, consumers and wholesale partners. By aligning product innovation, brand storytelling, marketplace execution and local consumer experiences around sport, the company aims to reinforce its competitive advantage.

Management believes this performance-first strategy is NIKE's core point of differentiation and will create a halo effect that gradually revitalizes its Sportswear and Jordan franchises, driving healthier consumer demand, improved full-price sell-through and sustainable long-term growth.

While macroeconomic pressures, soft discretionary spending and persistent weakness in the Sportswear and Jordan Streetwear businesses are expected to weigh on near-term performance, management remains confident that disciplined execution of its performance-led strategy will restore sustainable top-line growth over time. Investors will be watching closely to see whether continued momentum across performance categories can offset weakness in lifestyle products, improve marketplace health and ultimately drive stronger revenue growth, margin expansion and sustained earnings in the coming quarters.

NKE’s Competitionlululemon athletica inc. (LULU - Free Report) continues to benefit from the progress with its Power of Three X2 growth strategy. LULU remains focused on its long-term growth strategy, which centers on continuous product innovation, enhancing the guest experience and expanding its international presence to drive sustainable growth. lululemon’s international business remains one of its strongest growth levers, supported by robust demand in China and other global markets.

adidas AG (ADDYY - Free Report) is focused on revitalizing brand momentum through continuous innovation, operational improvements and strategic growth initiatives. The company is prioritizing profitability and long-term competitiveness by maintaining disciplined inventory management, enhancing cost efficiency and advancing sustainability efforts. Additionally, adidas is strengthening its global presence through localized market strategies, increased digital capabilities and the expansion of its retail footprint to drive sustainable growth.

NKE’S Price Performance, Valuation and EstimatesShares of NIKE have lost 33.6% in the past six months compared with the industry’s decline of 28.4%.

Image Source: Zacks Investment Research

From a valuation standpoint, NKE trades at a forward price-to-earnings ratio of 22.44X compared with the industry’s average of 19.6X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for NKE’s fiscal 2027 and fiscal 2028 earnings implies year-over-year growth of 10.1% and 35.1%, respectively. The company’s EPS estimate for fiscal 2027 and fiscal 2028 has moved south in the past 30 days.

Image Source: Zacks Investment Research

By all accounts, Nike's business in China should be firing on all cylinders.        

Sports-related products are the fastest growing consumer category in China and participation in sports and exercise is at its highest level in decades. The overall sportswear market has ballooned 51% in the past five years, fueled by a new focus on healthy living, according to GlobalData. 

But instead of thriving during China's sports renaissance, Nike's business in the region is languishing. Sales have fallen from the prior year eight quarters in a row, and the overall business has shrunk 30% since 2021, with annual revenue hitting its lowest level in eight years at the end of May. 

China was once Nike's fastest-growing region, beloved by investors for its high margins and potential for sustained growth. Now, it's the company's smallest market and has become a drain on a global turnaround that some on Wall Street believe is taking too long.

Some U.S. analysts expect Nike's China business to recover once its North America operations stabilize, but experts on the ground told CNBC its challenges in the region are deeper, and far different, from what it faces at home. Young Chinese shoppers are increasingly choosing domestic brands over expensive foreign names as part of a larger "China Chic" movement, and consumers are hungry for a localized assortment — not the same product that's being replicated from Utah to Shanghai. Nike is also working to overhaul its distribution model in China, which critics say has become messy, overly complex and driven by discounts. 

"In a way, Nike has just become irrelevant," said Yaling Jiang, the founder of consumer research firm ApertureChina and an expert on the Chinese consumer. "I don't think young people can remember what's the last new thing they've done. But if you mention Adidas to them, they will tell you about … their pet clothes, pet jerseys, or their China jackets."

During its most recent earnings call, Nike's outgoing finance chief Matt Friend couldn't say when the China business would return to growth, telling analysts that revenue trends in the near term "will be in line" with recent performance and "profitability will bottom before sales."

In January, Nike CEO Elliott Hill announced Cathy Sparks, a 25-year Nike veteran, would become the next vice president and general manager of Greater China, reporting directly to him.

In an interview with CNBC, she said Nike is taking the steps it needs to reconnect with Chinese consumers. 

"The one thing that I have certainly learned over the last six months is that the Chinese consumer has changed and they have high standards for what they want through product connections, engagement with the brand," said Sparks. "We know that if we can design footwear and apparel, lifestyle or performance, that's specifically targeted towards the unique needs of Chinese consumers, we'll drive full price revenue."

A Nike spokesperson pushed back on the idea that the company has lost relevance in the region and said what's changed is younger shoppers are looking for "hyperlocal connections," including through events and broader cultural moments.

"Nike has been in China for more than 40 years, and from day one, our approach has been to start with local consumer insight and turn that insight into inspiration, innovation and storytelling that can spark movement," the spokesperson said.

How 'China Chic' changed the sneaker marketWhen Nike turned to China as its next major growth market in the mid-2000s, it won by largely replicating its global strategy and betting that popular clothes and shoes in the Western world would also land with Chinese shoppers. 

For a time, the bet was right.

"The premium brand at the time that was available was Nike. Nike was just clearly better. They had cooler designs. They were more expensive. There was more brand cache," said a retail consultant based in Shanghai who advises domestic and international brands, including Deckers and Adidas, and asked not to be named to protect client relationships.

"If you go back to the early 2000s, if consumers had some money to spend, they were really quite image conscious. They wanted to show that they had whatever the nice thing was and at the time, Nike was it."

By the end of fiscal 2021, Nike's annual revenue in China hit an all time high of $8.29 billion. But in the backdrop, the tide was starting to shift against Western brands. 

In March 2021, a previous statement Nike made saying it was "concerned" about reports of forced labor in the Xinjiang region resurfaced, leading some Chinese consumers to call for a nationwide boycott and post videos online of them burning their sneakers. Popular Chinese actor Wang Yibo terminated his contract as a representative for Nike as domestic competitors Anta and Li-Ning doubled down on their use of Xinjiang cotton, using the conflict as a nationalistic marketing opportunity.

The controversy, which also impacted other Western brands that put out similar messaging, helped supercharge a political campaign that Chinese President Xi Jinping started years earlier called Guochao, or "China Chic" in English. It was designed to drum up pride in Chinese made and designed products and promote domestic brands over international ones. 

"In line with the period of 2010 to just before Covid, people did feel like maybe they were inferior if they wear Chinese brands … but the elevating cultural confidence campaign really shifted that mindset," Jiang said. "What this political campaign does is it also encouraged a lot of e-commerce platforms, including Alibaba's Taobao, Tmall and JD.com, to have a separate section just for the China Chic brands and … people started adopting this China Chic mindset and started feeling like owning something from your own culture is cooler than owning foreign brand."

Now, many younger consumers feel more connected to domestic brands like Anta and Li-Ning over premium, foreign brands like Nike, said Tracy Dai, the director of operations at consulting firm China Skinny, which helps overseas companies enter China or expand there.

"Years ago when you're talking to a high school boy asking which sports shoes you may want, they probably say Nike or Adidas, but right now if you ask them, they say Anta or Li-Ning," Dai said. "[Nike] probably is not that cool to them anymore."

A Nike spokesperson said all brands in China are facing intense competition and a "more demanding consumer environment" and it believes its efforts to reset the region "put us on the right path to win back consumers."

Beyond nationalism, Nike's decline in China is also about value. 

In the 20 years since Nike started supercharging its expansion in China, domestic brands have gotten better at production, marketing and brand building. 

At the same time, Chinese consumers have become more practical and selective, prioritizing value and innovation over branding, said Wei Kan, who spent around 15 years at Nike and Converse in China and Taiwan before starting his own brand consultancy firm Conduit Asia. As shoppers become more involved with sports and niche fitness activities, highly technical products are becoming more popular than Nike's assortment. 

"Nike is still more like a global, generalist brand at this moment. At the same time, a lot of products, the innovation pipeline is actually slower than the local brands and also the competitors," said Kan. "Chinese consumers are very sophisticated compared with like five or 10 years ago ... it all goes back to how the consumer perceives what kind of value they want to get from a shoe."

Nanjing styles via Portland, OregonWhile domestic brands have become major market leaders in China, some international brands are still winning, too. Lululemon's comparable sales, which exclude new store openings, grew 20% in China in fiscal 2025, while Adidas brand revenue grew 13% in the region during the same period.

Similar to Nike, Adidas had seen its business dramatically slow in China, but it's now growing again after the company shifted its focus to local product creation, decentralized decision-making and empowered local teams. 

For example, Adidas's local team designed and released its mega-viral Chinese Track Top jacket earlier this year in celebration of the Chinese New Year. The jacket sold out within 27 minutes and became a global phenomenon, with some on social media saying they flew to China specifically to buy the item or spent hundreds to snag one through reseller sites like StockX. 

It's also nailing local marketing. Recently, Adidas botched a translation on its website in the product description for a jacket and ended up becoming a viral meme. Rather than ignoring the meme, it created a T-shirt with the mistranslation on the front, Jiang said.

Meanwhile, experts said Nike has struggled to create the same kind of localized products and marketing. During the World Cup, its marketing campaigns came off as similar to what it was doing a decade ago, said Jiang. 

Part of the issue is that the Greater China team gets limited autonomy to release products and campaigns quickly without oversight from the corporate office in Portland, analysts said. 

"So everything, especially in terms of design, everything is actually coming from global," said Kan, who worked in marketing and branding for Nike and Converse in the region before leaving the company in November 2024. "There are very limited room for the local teams to build and also design the locally relevant products to the consumers. I think that is actually the biggest issue for the Chinese consumers here."

When asked about Nike's decision-making being concentrated at its headquarters, Sparks said the characterization was "not unfair" but added there is "nobody checking any of this work telling us yes or no." 

"I have felt from the moment I've landed in China that our local team has full autonomy to do what we need. Of course, working within the guardrails that are brand right," said Sparks. "I'm seeing that come to action with the marketing that we've put out. We are localizing retail concepts. The product design that you're gonna see from this team is really authentically Chinese, very relevant."

Last week, Sparks announced the company had hired its first-ever Greater China vice president of local product creation, who will be focused on building an assortment that's designed, developed and made in China for Chinese shoppers. 

The company plans to start with two lifestyle capsules — one for Nike sportswear and one for Jordan streetwear — that'll be ready in time for the holidays, followed later by performance apparel and footwear.

"We'll be doing this over the next 18 months, bringing all these new capabilities on board so that we can complement global innovation with local innovation needs, styling needs, fit needs, even color, which can be unique in China," said Sparks.

Why Nike is resetting China distributionMarketing and localization aside, Nike's China distribution model has become a complex web that Sparks is now working to unwind after the company allowed its brick-and-mortar distributors to start selling online during the Covid-19 pandemic even though their distribution agreements didn't include digital.

"What we didn't do was reset that coming out of Covid as consumers returned to brick and mortar," said Sparks. "And because of that, it just created this incredibly fragmented marketplace where the consumer journey became really messy. Our ability to tell clear innovation stories, nearly impossible."

Sparks said the decision to shut down those online storefronts is necessary to repair Nike's China business, but BNP Paribas equity analyst Laurent Vasilescu estimates the change could reduce the company's revenue by as much as $1 billion annually, representing about 17% of total sales in the region. 

In response, Sparks said the change means some distribution will inevitably go away but "we believe we'll be able to replace total value with full-price sales and a more premium experience." 

"We actually believe it is critical. If we don't reset is where the long-term impact will continue to slide in a direction that we don't want to see," said Sparks. "We don't actually believe that we will have a long-term negative impact. We think it'll be stronger."

Nike is planning to cut off thousands of online distributors in China beginning in January as the sneaker giant looks to clean up what's become a messy digital marketplace and get the region back to growth, the company said Tuesday. 

Starting next year, Nike's online footprint will shift primarily to the retailer's official website and app, and the storefronts it operates on Tmall, JD.com and Douyin, some of China's largest online marketplaces and social platforms. 

Currently, consumers can shop Nike through all of those channels as well as thousands of other online storefronts powered by Nike's brick-and-mortar partners in the region and a network of secondary distributors. While the vast digital network has led to widespread consumer access to Nike's products, it's also created an inconsistent branding and pricing experience and hampered the company's efforts to reverse a sales decline in the region. 

"These new flagships will serve as the single, elevated destination for Nike within these ecosystems, with clearer product presentation, stronger storytelling and more connected consumer journeys," Cathy Sparks, Nike's new vice president and general manager of Greater China, wrote in a letter. "This is about strengthening the platforms where consumers already begin and end their shopping journey, making sure those experiences are direct, consistent and unmistakably Nike."

"This is not about reducing access. It is about reducing fragmentation and strengthening the consumer journey," she said. "When the experience is consistent, the brand becomes stronger." 

Nike's plans to pare back its online footprint are designed to create a better, more consistent experience for the consumer and allow it to take back pricing control online. However, there are also concerns it could lead to a material drop in revenue in a region that's already shrunk about 30% in the last five years. 

News about Nike's plans to cut off online distributors first came to light late last month in a local Chinese media report. It prompted a note from BNP Paribas equity analyst Laurent Vasilescu, who wrote the move is reminiscent of Nike's ill-fated decision to cut off wholesalers in North America, which contributed to its collapse of market dominance in the region, as well as steep declines in sales and margins. 

"This strategy opened up shelf space for competitors and the strategy ended poorly for Nike. We believe the same could happen if it takes the same approach in China," Vasilescu wrote last month, adding that BNP was sticking with its underperform rating for the company. "We don't think Nike has a distributor problem but rather a product problem which also applies in other markets." 

The change is also expected to hurt Nike's brick-and-mortar partners in the region, which have expanded their online presence in recent years to grow their own businesses. 

Still, Topsports, Nike's largest distributor in mainland China, said it supports the company's decision. 

"Topsports has worked with Nike for 27 years based on the principle of mutual benefit and shared growth," Topsports CEO Yu Wu said in a statement. "This adjustment will bring some short-term pressure to our business. But we firmly believe that, over the medium- to long-term, this direction will help promote a healthier, more orderly, and more sustainable retail ecosystem in China, while further improving consumer experience and product appeal."

"Looking ahead, we will continue to work closely with Nike, leveraging our strengths in offline retail operations, local consumer service, and deep market development across city tiers," Wu said. "Through new concept sport stores and high-quality physical retail experiences, we will bring Chinese consumers richer and more meaningful sport experiences."

Key Takeaways NIKE is expanding its innovation pipeline with new footwear and technologies across sports categories.NKE plans to extend NIKE Mind and Aero-FIT while launching products tied to running and athletes.NIKE expects stronger performance categories to support Sportswear and Jordan demand recovery. NIKE, Inc.’s (NKE - Free Report) innovation pipeline refers to its strategy of introducing new products, technologies and designs to reignite consumer interest and boost sales growth. As innovation has become a key pillar of NKE’s turnaround strategy, it can help it overcome challenges, including weaker demand, heightened competition and slower digital sales.

NIKE is expanding beyond its traditional franchises by introducing performance-focused footwear and apparel, such as the Pegasus Premium, Vomero 18 and other running and training products. Under its “Sport Offense” strategy, NIKE is increasing investments in key sports categories, including running, basketball, football and women’s sports. The company is emphasizing performance innovation to strengthen its connection with athletes.

The company views NIKE Mind as one of its most promising innovation platforms and plans to expand it beyond its current offerings beginning in spring 2027. Initially introduced in football kits, NKE’s Aero-FIT technology is set to expand into running apparel, where it is expected to enhance athletic performance and comfort. Its upcoming launches, including Caitlin Clark-branded products and the latest Free MetCon line, are expected to strengthen NIKE’s position in key performance categories.

The goal is to develop a steady stream of innovative footwear, apparel and accessories tailored to consumer preferences. Management believes that strong performance in categories such as running, basketball and football will create a “halo effect” for its Sportswear and Jordan brands, which together account for nearly half of the company’s revenues. To revive growth in these segments, NIKE is repositioning these businesses. NIKE Sportswear plans to launch more than a dozen new footwear styles in the second half of fiscal 2027, while leveraging its performance-focused innovations to drive demand.

Overall, NIKE’s strong innovation pipeline has the potential to reignite consumer demand, support higher full-price sales and restore long-term growth. However, the success of this strategy will ultimately depend on how consumers respond to the company’s new product launches in the coming quarters.

NKE’s Competitionlululemon athletica inc. (LULU - Free Report) continues to benefit from the progress with its Power of Three X2 growth strategy. LULU remains focused on its long-term growth strategy, which centers on continuous product innovation, enhancing the guest experience and expanding its international presence to drive sustainable growth. lululemon continues to introduce new fabrics and performance-focused products across its core women’s and men’s businesses while expanding into adjacent categories, such as footwear and accessories.

adidas AG (ADDYY - Free Report) is focused on strengthening its brand appeal through continuous product innovation, operational excellence and strategic growth initiatives. ADDYY remains committed to enhancing profitability and long-term competitiveness by maintaining inventory discipline, improving operational efficiency and advancing its sustainability efforts. In addition, adidas is expanding its global footprint through localized market strategies, increased digital investments and an ongoing expansion of its retail store network.

NKE’S Price Performance, Valuation and EstimatesShares of NIKE have lost 33.1% in the past six months compared with the industry’s decline of 28.1%.

Image Source: Zacks Investment Research

From a valuation standpoint, NKE trades at a forward price-to-earnings ratio of 23.79X compared with the industry’s average of 20.63X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for NKE’s fiscal 2027 and fiscal 2028 earnings implies year-over-year growth of 10.8% and 35.4%, respectively. The company’s EPS estimate for fiscal 2027 and fiscal 2028 has moved south in the past seven days.

Image Source: Zacks Investment Research

Shares of Nike (NKE +3.72%) closed Friday at about $44, up nearly 4% and extending a rebound that began when the company reported fiscal fourth-quarter results at the end of June. Even after that bounce, the stock sits about 44% below its 52-week high of $80.17.

Adding to the intrigue is CEO Elliott Hill, who has been putting his own money into the stock near its lows. This begs the question: Is this a good time to follow the CEO into the stock?

Image source: The Motley Fool.

A profit built mostly on a refund Nike's fiscal fourth quarter of 2026 (the period ended May 31, 2026) looked, at a glance, like a breakout. Revenue came in at $11.0 billion, and net income jumped 407% year over year to $1.1 billion. Diluted earnings per share reached $0.72.

But most of that bottom-line surge traces to a single item. Of the $0.72 in earnings per share, $0.52 came from an expected recovery of import duties Nike had paid under the International Emergency Economic Powers Act (IEEPA) -- a nearly $1 billion accounting benefit booked after courts struck down the tariffs. Strip it out, and the company earned about $0.20 per share from running its business.

The same distortion shows up in margins. Nike's gross margin jumped about 9 percentage points, to 49.2%. But almost all of that came from the tariff recovery. Strip it out, and the underlying gross margin was roughly flat -- near 40%, about where it sat a year earlier.

Fourth-quarter revenue fell 1% year over year, and dropped 4% on a currency-neutral basis, which strips out the effect of a weaker dollar. That currency-neutral decline widened as the year went on, from about 1% in the fiscal first quarter to 4% in the fourth. For the full year, sales were essentially flat -- a stabilization after the prior year's steep drop, not yet a recovery. So the reported steadiness owed something to currency, and the profit jump owed almost everything to a one-time refund.

North America is the part that's turning Underneath the noise, though, one figure suggests the turnaround is more than a story management is telling. Revenue in North America, Nike's largest market, rose 3% year over year to $4.83 billion in the quarter, and climbed 5% for the full fiscal year. After a long slide, Nike's home market is finally growing again, led by a rebound in its wholesale channel as the company rebuilds relationships with the retail partners it had spent years walking away from.

Meanwhile, Greater China, once one of Nike's most dependable growth drivers, fell another 12% in the quarter and 11% for the full year. And Nike Direct, the company's own stores and app, kept sliding, as management deliberately routes more sales back through wholesale partners.

In other words, North America is inflecting, but it hasn't yet pulled the whole company back to growth.

Then there's the insider buying. CEO Elliott Hill has twice put about $1 million of his own money into Nike shares on the open market -- once in late December, near $61 a share, and again in April, near $42, close to the stock's low. Other insiders bought around the same time, including board member Tim Cook -- the CEO of Apple.

Of course, insider purchases guarantee nothing about the stock's prospects. Even inside executives can misjudge their own companies. But a chief executive buying more as the price falls at least signals that the people closest to the business think it's worth more than the market does. So, it's at least worth some consideration.

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But what about the stock's valuation?

At about $44, Nike trades at about 21 times earnings. But that multiple is inflated by the one-time tariff benefit baked into the past year's profit. Strip it out, and the price-to-earnings ratio is closer to 28 -- hardly a bargain for a business whose sales are still shrinking outside North America.

So, is the stock a buy here? I'm encouraged, but I'm not buying yet. The recovery in North America and Hill's willingness to buy near the lows are the most convincing signs of a turnaround Nike has offered investors in a while. But the headline profit leans on an accounting item that won't return, and the parts of the business that most need to inflect -- Greater China and the direct-to-consumer channel -- still haven't. At this valuation, I'd want to see companywide sales turn positive on a currency-neutral basis and China stop falling before treating the turnaround as more than early. Until then, I'm content to watch a genuinely improved story get a quarter or two closer to proving itself.

Key Takeaways NKE's Sport Offense shifted 8,000 teammates into vertical sport teams to sharpen execution.Running has logged five straight quarters of double-digit growth, while lifestyle remains weak.NKE's margin path is clouded by tariff assumptions, lower markdowns and tighter inventory control. NIKE Inc. (NKE - Free Report) is trying to move past fiscal 2026 with a sport-led model and cleaner marketplace. The reset is not linear.

Performance categories, wholesale repair and North America are improving. Yet tariffs, NIKE Direct weakness and Greater China pressure keep the recovery incomplete.

NKE Sport Offense Is Reshaping ExecutionNIKE’s Sport Offense is central to its next phase. The structure moved about 8,000 teammates into vertical sport teams, creating smaller cross-functional groups focused on specific consumer communities.

The goal is faster decisions, sharper product work and more relevant storytelling across product, brand, marketplace and operations. NIKE is trying to rebuild growth through execution and sport authenticity rather than broad promotions.

Management expects core Win Now actions to sunset by the end of the calendar year. That would shift more emphasis to Sport Offense as the operating model guiding Nike, Jordan and Converse.

NKE Performance Demand Is Beating LifestyleThe clearest trend in NIKE’s portfolio is the split between performance and lifestyle. Running has delivered five consecutive quarters of double-digit growth and added roughly $1 billion over that period.

Performance product grew mid-single digits in fiscal 2026. In fourth-quarter fiscal 2026, running, training and global football posted positive year-over-year retail sales comparisons.

Sportswear and Jordan Streetwear remain the drag. Sell-through is still challenged, affecting discounting and future order books. Together, those businesses represent about half of NIKE’s revenue, which makes their recovery critical.

That split also shapes how investors may compare NIKE with adidas AG (ADDYY - Free Report) and Birkenstock Holding plc (BIRK - Free Report) . adidas remains a relevant global athletic competitor, while Birkenstock gives investors another footwear name to watch within the broader shoes and retail apparel space.

NKE Margin Path Depends on Tariff PressureNIKE’s fourth-quarter fiscal 2026 gross margin expanded 890 basis points to 49.2%. That headline number benefited from a 900-basis-point gain tied to the expected recovery of International Emergency Economic Powers Act tariffs. In fiscal 2026, gross margin expanded 20 basis points to 42.9%.

Excluding that benefit, gross margin would have been 40.2%, down 10 basis points year over year. That makes the margin trend more complicated than the reported figure alone suggests.

Management expects gross margin expansion to begin in the first quarter of fiscal 2027. Still, the outlook assumes incremental tariff rates of 10% through the end of July and 15% thereafter.

Reduced markdowns and better operating leverage also matter. NIKE is lowering digital off-price activity, tightening buys and managing inventory more closely, but tariff volatility remains a cost headwind.

NIKE Channel Mix Is Shifting AgainNIKE’s channel strategy is moving back toward a more balanced marketplace. Wholesale revenues grew 6% on a reported basis and 4% on a currency-neutral basis in fiscal 2026.

In fourth-quarter fiscal 2026, wholesale revenues rose 4% reported and 1% currency neutral, led by North America. Revenue growth and retail sales comparisons with Foot Locker turned positive for the first time in four years.

NIKE Direct remains under pressure. NIKE Direct revenues in fourth-quarter fiscal 2026 declined 7% reported and 9% currency neutral, including a 12% drop in NIKE Brand Digital and a 7% decline in owned stores.

The company is reducing promotions and trying to restore a premium experience across digital and physical retail. A healthier wholesale-direct mix could improve demand visibility, but only if Direct stops weakening.

NKE Scorecard Shows Trend Risks Remain HighNIKE’s emerging trends are meaningful, but the investment scorecard still points to caution. The company has visible progress in running, global football, training, wholesale execution and North America, yet the recovery is not broad enough.

Greater China remains in reset mode. Fiscal fourth-quarter revenues in the region declined 12% reported and 17% currency neutral, with NIKE Direct, digital and wholesale all lower.

NKE currently carries a Zacks Rank #4 (Sell). The stock also has a Value Score of D, Growth Score of F, Momentum Score of F and VGM Score of F.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Rank emphasizes earnings estimate revision trends, while the Style Scores help assess value, growth and momentum characteristics. This combination does not erase NIKE’s strategic progress, but it suggests the stock still lacks the near-term support investors typically seek before treating a turnaround as investable.

Nike's (NKE +2.39%) iconic global brand is not delivering the steady growth investors are used to. The stock has been in a downward spiral since hitting an all-time high during the COVID-19 pandemic and has fallen another 32% year to date.

The discount has brought the dividend yield up to 3.7%, more than three times the S&P 500 average. Is this yield too good to pass up? Let's first assess Nike's dividend payout health before determining whether this is the smartest dividend stock to buy in 2026.

Image source: The Motley Fool.

Dividend coverage is weakening Nike is still navigating challenging macroeconomic headwinds, including inflation and higher energy prices, which are hurting consumer spending. It reported flat revenue for fiscal 2026, which ended in May, with fourth-quarter revenue down 1% year over year.

The weak top-line growth and investments to turn things around have caused Nike's trailing-12-month free cash flow to plummet 65% year over year to just over $1 billion. This doesn't leave enough room for the dividend. The company paid out nearly $2.4 billion in total dividends to shareholders over the last year.

Nike generated $3.1 billion in net income over the last year. With over $7.5 billion in cash on the balance sheet, the dividend is unlikely to be cut. Still, the elevated payout ratio to free cash flow raises this risk for investors unless there is a material recovery in profitability.

The good news is that management has made progress in tightening inventory to better manage costs. It is prioritizing margins over maximizing near-term revenue growth, with gross margin expected to improve starting this quarter.

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Nike's turnaround will take time Nike sportswear and Jordan streetwear remain weak, and together account for about half of Nike's total revenue. The only bright spot appears to be running, which has delivered five consecutive quarters of double-digit growth.

Management is actively working to reduce discounting to boost margins and adjust its product mix to drive sales growth. Over 150 stores have refreshed their inventory with performance-based products, which are seeing stronger demand than lifestyle products. Nike is also introducing a dozen new footwear styles later this year. However, management expects these efforts to take time to generate consistent results.

The turnaround is progressing, but probably not as quickly as Wall Street anticipated. Management is confident in its actions to improve margins. Still, the elevated dividend payout to free cash flow doesn't make the stock the safest choice for income investors.

I wouldn't call Nike the "smartest" dividend stock to buy right now. There are more durable consumer brands, such as Coca-Cola, that offer high yields but don't carry the execution risk associated with a major turnaround effort. Investors who buy Nike shares will need to closely monitor its quarterly earnings to ensure the company is on track to recover margins and free cash flow, which is crucial for sustaining and growing the dividend.

Nike (NKE +2.44%) shareholders have been suffering over the past few years as the company has dealt with problem after problem.

There were some glimmers of hope in the fiscal 2026 fourth-quarter (ended May 31) report released this past week, but management cut near-term guidance and doesn't expect meaningful progress over the next six months. So why is Nike stock rising?

Image source: Nike.

Getting its game on Nike is still picking up the pieces from some major missteps, compounded over the past few years by high inflation and strong tariff exposure. The company was poorly positioned to handle the challenges when it cut out wholesale partnerships and let its innovation engine slip.

In its favor, it got a new CEO and mapped out a turnaround plan, and while external factors are still weighing on its progress, appears to have stemmed the rapid declines.

Here are some of the fourth-quarter highlights, which beat the top and bottom lines:

Revenue decreased 1% year over year, with wholesale up 4% and direct-to-consumer down 7%. Gross margin expanded 8.9 percentage points to 49.2%. Earnings per share (EPS) increased from $0.14 last year to $0.72 this year. While momentum had been building into the quarter, it stalled when the Iran war began and oil prices spiked, putting pressure on global consumers. Although that's been easing, management had to reshuffle orders and block too much inventory that could eventually pile up and have to be marked down for sale. Over the next six months, sluggish sales are expected.

Going on the offense One particular area where Nike is truly struggling is China, where sales dropped 17% for the full year. CEO Elliott Hill said Nike is doing a "comprehensive reset" in the region, going on the offense and working with local partners to see how it can win.

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But there were many positive updates. Performance sales were up mid-single digits for the full year, which marked the fifth consecutive quarter of double-digit growth in Nike Running.

Although China is struggling, North America is showing signs of recovery, and the wholesale business grew by double digits for the full year. So while the near term looks bleak, the recovery is possible.

In the meantime, Nike stock has fallen low enough to look like a strong value. It tanked after earnings, and its P/E ratio dipped below 20. At the current price, its dividend yields 3.8%. Value investors may have seen the opportunity, and long-term investors might be counting on a big recovery later this year.

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Highlights

Nike’s earnings results suggest brands are rethinking how they measure D2C success.

The next phase of D2C centers on loyalty, payments and customer relationships that extend across every shopping channel.

As consumers become more selective, retailers are prioritizing reach and convenience alongside first-party data.

The shorthand of direct-to-consumer (D2C) might boil down to selling through a brand’s own website or brick-and-mortar location. But writ large, the model is about controlling the customer relationship.

Consumer brands poured resources into owned channels, betting that higher margins, richer customer data and stronger loyalty would outweigh the costs of acquiring customers themselves.

Recent events across retail suggest that calculation is changing. Several of the companies that helped define the D2C era have spent the past few years abandoning the idea that growth depends on steering every customer into owned channels.

By way of example, mattress seller Casper ultimately agreed to go private after years of struggling to produce sustainable returns as a public company.

SmileDirectClub entered bankruptcy.

Most recently, Allbirds agreed to sell assets and focus on artificial intelligence.

While each company faced its own challenges, together they illustrate a broader lesson. Building a recognizable brand and building an efficient distribution model are not necessarily the same exercise.

Nike’s fourth-quarter earnings results released Tuesday (June 30) provided the latest and perhaps clearest indication that even the industry’s largest brands are recalibrating the balance between owned channels and wholesale distribution. During the quarter, Nike Direct revenue fell 9%, including a 12% decline in Nike Digital, while wholesale revenue increased 1%. In North America, wholesale revenue climbed 10% as the company continued rebuilding relationships with retail partners.

“The integrated marketplace is one of our most important areas of transformation,” Nike President and CEO Elliott Hill said during a Tuesday earnings call. “We’ve been rebuilding our wholesale relationships, expanding our outreach and improving how we show up across channels.”

Hill outlined a strategy in which owned stores, digital channels and wholesale partners each contribute to the customer relationship. He also said Nike is “discounting less on Nike Digital” while continuing to invest in stores that fit its long-term strategy.

The broader read-across extends beyond Nike. As digital advertising costs have increased and consumers have become more willing to compare prices across retailers, marketplaces and brand sites, the economics of insisting that every purchase occur through an owned channel have become less compelling.

Brands still want first-party data. They still want loyalty. They still want recurring engagement. However, they arguably appear less concerned about whether the transaction itself occurs on a proprietary website.

Relationships Matter More Than Channels PYMNTS Intelligence’s latest “Global Digital Shopping Index,” commissioned by Visa Acceptance Solutions, found that merchants’ own mobile apps remain their strongest individual growth channel, with 57% reporting higher sales over the past year. At the same time, websites, physical stores, third-party marketplaces and delivery platforms all generated growth for roughly half of merchants surveyed.

The message is that consumers are buying wherever it is most convenient, and merchants are adapting by investing across all of them.

Merchants’ mobile apps generally offer a better shopping experience. Merchants are more likely to provide biometric authentication, digital wallet autofill, stored credentials, one-click checkout and QR code payments inside their apps than on their websites. Those capabilities reduce friction, shorten checkout and make repeat purchases easier. Ensuring that loyalty accounts, payment credentials and personalized offers recognize the customer are critical wherever that customer chooses to shop.

Consumers are growing more deliberate about spending. PYMNTS Intelligence’s latest research on household spending found that roughly two-thirds of consumers are trimming purchases or actively looking for ways to reduce everyday expenses. Under these conditions, shoppers are less inclined to remain loyal to a single retailer or website. They compare prices, search across multiple merchants, and expect checkout to be fast and familiar regardless of where they complete the purchase.

Brands face changing D2C economics. Customer acquisition costs have risen, and forcing every shopper into an owned channel risks sacrificing reach at a time when consumers are moving fluidly among retailer websites, marketplaces, social commerce and physical stores. The objective becomes preserving first-party relationships even when distribution broadens.

Nike shares fell 4% in premarket trading on Wednesday after the sportswear giant's latest quarterly results failed to convince investors that its turnaround under Chief Executive Officer Elliott Hill is gathering pace.

Although Nike topped Wall Street expectations for both earnings and revenue, a cautious outlook for the coming quarters, persistent weakness in China and continued uncertainty around consumer demand overshadowed the better-than-expected performance.

The company's results also weighed on European sportswear stocks, with Adidas and Puma both falling more than 1% in early trading.

Nike shares have already declined around 35% this year as investors grow increasingly concerned about the pace of the company's recovery amid rising competition and shifting consumer preferences.

Nike reported fiscal fourth-quarter earnings of 20 cents a share, excluding a 52-cent benefit related to the expected recovery of import tariffs.

Revenue declined 1.1% from a year earlier to $11 billion.

Analysts polled by LSEG had expected earnings of 12 cents per share on revenue of $10.9 billion.

Despite the earnings beat, investors focused on management's guidance that sales are expected to continue declining through the first half of fiscal 2027 as the company navigates tariff pressures, geopolitical uncertainty and cautious consumer spending.

Nike now expects revenue to decline by low- to mid-single digits during the period from March through November, compared with its earlier forecast for a low-single-digit decline.

The company also continues to expect earnings to remain largely flat over the same period.

"We are not expecting the environment to improve meaningfully over the next six months," Chief Financial Officer Matthew Friend said during the earnings call, citing evolving tariff policies, conflict in the Middle East and oil prices as factors that could pressure both costs and consumer demand.

Given the uncertain backdrop, Nike plans to tighten inventory and reduce orders, a strategy management believes will support margins but weigh on near-term revenue.

Despite the muted outlook, some analysts said Nike's renewed focus on sports is beginning to deliver encouraging signs.

Jefferies analysts said the company's fiscal fourth-quarter results were better than feared.

"Nike's emphasis on its sports business is showing early signs of paying off, though performance in China remains a drag on the company," the brokerage wrote.

According to Jefferies, Elliott Hill's "sport offense" strategy has helped return Nike's wholesale business to growth, validating the company's renewed emphasis on performance categories.

However, analysts said continued weakness in Nike's direct-to-consumer business, including its retail stores and digital platform, remains a significant challenge.

Nike has spent the past two years rebuilding relationships with wholesale partners while attempting to reduce excess lifestyle inventory that had weighed on sales and margins.

The company also pointed to early progress in several areas, including stronger World Cup marketing campaigns, faster product launches and improving football demand after a slowdown in April.

Management forecast a slightly positive gross margin during the first quarter and said more than a dozen new footwear styles are scheduled for launch as part of the company's product refresh.

CEO Elliott Hill acknowledged that rebuilding consumer demand will take time.

"We know we're not living up to our full potential," he said.

China remains one of Nike's biggest obstacles.

Revenue in Greater China, which accounts for roughly 15% of Nike's annual sales and is its third-largest market after North America and Europe, the Middle East and Africa, continued to post double-digit declines during the quarter.

Outgoing finance chief Matthew Friend said the company expects China to remain under pressure as Nike works with retail partners to clear excess inventory.

Some analysts said the restructuring effort is beginning to show signs of progress but warned that meaningful sales growth is unlikely until the inventory reset is complete.

Nike is pursuing a more premium, sports-focused strategy in China, although analysts expect the benefits of that approach to emerge gradually rather than immediately.

Hill said the company expects newly launched footwear products to contribute more meaningfully to growth during 2027 as the broader product pipeline gains traction.

Analysts remain divided over how quickly Nike can regain lost market share.

Bernstein said the company's decision to prioritise marketplace health over short-term revenue growth is strategically sound but likely to delay any meaningful earnings recovery.

"Revenue declines through H1 mean no earnings growth until at least H2'27 as Nike prioritizes marketplace health over near-term sales — a good decision for the company but not for rapid recovery of the stock," Bernstein analysts said.

Nike has struggled to regain momentum after losing customers to newer athletic brands while also dealing with softer consumer demand globally.

In March, management acknowledged that efforts to revive growth were taking longer than expected despite improving trends in North America, particularly in running and football footwear.

Some analysts, however, remain unconvinced that Nike's latest product launches have resonated strongly enough with consumers.

The company's digital business has also remained under pressure as Nike attempts to reposition the platform around higher-priced products rather than relying on discounting.

The prolonged decline in Nike's share price has also prompted speculation that the stock could eventually lose its place in the Dow Jones Industrial Average.

Wall Street has become increasingly cautious in recent weeks.

KeyBanc Capital Markets downgraded the stock last week, saying investors may have to wait until Nike's investor day later this year before gaining greater confidence in the company's long-term turnaround strategy.

Even after Wednesday's decline, Nike trades at a forward price-to-earnings multiple of about 21.95, above Adidas' multiple of 16.81, according to LSEG data, suggesting investors continue to price in a recovery that has yet to fully materialise.

Live Coverage Updates appear automatically as they are published.

Live Updates 47 minutes ago

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That wraps up our initial coverage of Nike’s Q4 results. Thank you for stopping by!

Check out management’s earnings call at 5 PM ET for more updates.

52 minutes ago

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Nike’s reported $0.72 EPS looks like a massive beat versus Wall Street’s $0.12 estimate, but investors should understand what drove the result.

The company said fourth-quarter earnings included a $986 million benefit from the recovery of tariffs. That one-time item added approximately $0.52 per share to diluted EPS and boosted gross margin by roughly 900 basis points.

Adjusting for that benefit paints a different picture:

Reported EPS: $0.72 Less one-time tariff recovery: $0.52 Adjusted core EPS: $0.20 Likewise, Nike’s reported 49.2% gross margin falls to roughly 40.2% after excluding the tariff-related benefit.

The quarter was still better than expected, but the headline earnings number significantly overstates the underlying improvement in Nike’s core business. Going forward, investors will likely focus on whether Nike can generate sustainable revenue growth and margin expansion without similar tailwinds.

1 hour ago

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Nike’s revenue trends showed a business still navigating a challenging consumer environment, with some encouraging pockets of strength. Fourth-quarter revenue totaled $11.0 billion, down 1% from a year ago, as continued weakness in Greater China and EMEA weighed on overall results.

Underneath the surface, however, the sales mix tells a more nuanced story. Wholesale revenue increased 4% to $6.6 billion, driven primarily by growth in North America, while Nike Direct revenue declined 7% to $4.1 billion.

Management said Nike Brand Digital sales fell 12%, while revenue from Nike-owned stores decreased 7%, reflecting continued pressure across its direct-to-consumer business.

Overall, Nike Brand revenue slipped just 0.4% year over year, suggesting the company’s core product portfolio is beginning to stabilize even as certain regions remain under pressure.

Investors will likely be watching upcoming quarters to see whether wholesale momentum continues and whether digital sales can return to growth as Nike’s turnaround progresses.

1 hour ago

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While investors will naturally focus on Nike’s earnings beat, the biggest driver of the quarter was a dramatic improvement in profitability. Gross margin jumped 890 basis points to 49.2%, with the company attributing most of the increase to the expected recovery of International Emergency Economic Powers Act (IEEPA) tariffs.

According to Nike, the tariff recovery contributed roughly 900 basis points of gross margin benefit during the quarter and added approximately $0.52 per diluted share to earnings.

That helps explain why EPS came in at $0.72, crushing Wall Street’s $0.12 expectation despite revenue remaining under pressure.

Investors will now be listening closely on the conference call to determine how much of this margin improvement represents a one-time benefit versus a more durable improvement in Nike’s earnings power. If margins remain elevated even as sales recover, it could meaningfully improve the company’s profitability heading into fiscal 2027.

1 hour ago

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Nike just reported fiscal fourth-quarter earnings, with shares initially up 2% in after-hours trading. Here are the key numbers:

Key Results Revenue: $10.97 billion vs. $10.84 billion expected EPS: $0.72 vs. $0.12 expected Gross Margin: 49.2% vs. 40.3% a year ago Inventory: $7.50 billion, up 0.2% year over year Nike Brand Revenue: $10.72 billion, down 0.4% year over year Greater China EBIT: $243 million, down 20% year over year Quick Read Nike delivered a solid beat on both revenue and earnings, while gross margin improved sharply year over year. Investors will now focus on fiscal 2027 guidance and management’s commentary on demand trends, particularly in China and North America.

1 hour ago

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Beyond the bull/bear setup, four wildcards aren’t fully reflected in the $0.11 consensus.

Four Wild Cards Hiding in Tonight’s Report KeyCorp’s eleventh-hour cut: At 12:13 PM ET today, KeyCorp slashed its Q4 estimate from $0.29 to $0.12, resetting the bar hours before the release. CFO transition: Matthew Friend is stepping down, with former Pfizer CFO David M. Denton taking over. Expect commentary on capital allocation and guidance philosophy. Tax rate normalization: The effective tax rate jumped to 20.0% from 5.9%, a swing that could cut either way on EPS. Dow removal risk: Nike is reportedly on “thin ice” for index removal, an overhang amplifying any soft commentary. With shares at $41.10, sentiment is fragile.

1 hour ago

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After falling from roughly $180 at its 2021 peak to around the $40 range, Nike stock now trades at about 22x forward earnings and is approaching 1x trailing sales, a valuation the company hasn’t seen since the depths of the 2008-09 financial crisis.

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The question is whether the business can grow into that valuation. Analysts currently expect 22% EPS growth in fiscal 2027, even though revenue is projected to be essentially flat.

If management can show investors that North America is stabilizing, China is improving, and revenue growth is finally returning, the market may begin to price Nike as a recovery story rather than a company still searching for a bottom.

1 hour ago

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Nike’s turnaround ultimately comes down to driving revenue growth again.

The company has posted year-over-year revenue declines in six of its last nine quarters, while analysts currently expect another 2% sales decline this quarter.

Investors have shown they’re willing to look past near-term margin pressure, but they need evidence that demand is stabilizing.

For a brand as mature as Nike, sustained revenue growth is likely the clearest signal that the business has turned the corner and will be top of mind among investors tonight.

1 hour ago

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With Nike (NYSE:NKE | NKE Price Prediction) reporting after the close, prediction markets price a 90% probability of beating the $0.12 EPS consensus. Here’s how each side frames it.

Bull Case Beat streak: Four consecutive EPS beats, with Q3 surprising by 24.25%. Insider conviction: CEO Hill bought 47,320 shares near $42.26 in April, alongside directors Cook, Rogers, and Swan. Wholesale and North America momentum: North America wholesale grew 11%; Running rose over 20%. Bear Case Profitability eroding: Q3 net income fell 34.51%; gross margin compressed 130 bps. China guidance: CFO Friend guided Q4 China down approximately 20%. Sell-the-news pattern: Shares are down 33.87% YTD, with average 1-week post-earnings change of -3.71%. Converse collapse: -35% YoY, EBIT now a loss. 1 hour ago

Live

With Nike (NYSE:NKE) reporting after the close, here is what to listen for on the call.

Top 5 Analyst Questions Are Win Now actions still on track to finish by calendar year-end? Is Greater China stabilizing after the 10% currency-neutral Q3 decline? When does gross margin inflect in Q2 FY2027? What stops the Converse bleed after the -35% Q3 drop? Can Nike Direct/Digital return to growth? Key Topics & Buzzwords Listen for: “Sport Offense,” “integrated marketplace,” sell-through, NIKE MIND traction. Red Flags EMEA inventory still elevated, withdrawn FY27 guidance, or tariff impact exceeding the guided 250 basis points. With shares -33.87% YTD, tone matters as much as the numbers. 2 hours ago

Live

Nike has already laid out much of its turnaround strategy, making tonight’s earnings report an important bridge to the company’s fall Investor Day.

CEO Elliott Hill recently said the company’s “Win Now” initiatives remain on track to be substantially completed by year-end, with full long-term financial guidance expected this fall.

While analysts expect Nike to earn just $0.11 per share, the bigger key questions for the business are whether gross margins continue to recover, whether sales trends in China show signs of stabilizing, and whether management strikes a confident tone about the pace of the turnaround.

CEO Hill’s recent open-market stock purchase has also raised expectations that leadership believes the business is approaching an inflection point. If Nike can pair solid execution with a constructive outlook, investor sentiment could finally begin catching up with the company’s improving operating fundamentals.

Investors are watching Nike (NYSE:NKE) ahead of fiscal Q4 2026 results due at 4:15 PM ET after the market closes today. With shares down 33.87% year-to-date, this report has to give Nike’s turnaround story a pulse and could offer promising guidance for fiscal 2027.

The Comeback Hits Its Toughest Test CEO Elliott Hill called fiscal 2026 the “middle innings” of Nike’s comeback, and the last report showed why. Q3 revenue was flat on a reported basis, EPS of $0.35 beat the $0.28 consensus, and gross margin declined 130 basis points to 40.2% on a 300 basis point tariff hit in North America.

Since then, shares are down 9.47% over the past month and trade near a 52-week low of $40.00, well below the 200-day moving average of $57.94. Despite the decline, CEO Elliot Hill bought 47,320 shares on April 13 at roughly $42.27, joined by directors Tim Cook, John Rogers, and Bob Swan.

Consensus Estimates Metric Q4 FY26 Estimate Prior Year EPS $0.11 $0.14 Revenue trajectory (company guide) Down 2% to 4% — FY26 EPS (TTM) $1.52 diluted FY26 Revenue (TTM) $46.52B Tariffs, China, and the FY27 Setup Tonight, I’ll be watching three things. First, gross margin. CFO Matthew Friend guided Q4 margin down 25 to 75 basis points, including 250 basis points of tariff drag. He flagged Q2 fiscal 2027 as the last quarter of material tariff headwinds, so any commentary that tightens that timeline matters.

Second, Greater China. Friend told the Street to expect the region down approximately 20% in Q4 as Nike intentionally pulls sell-in to clean the marketplace. Q3 China revenue was down 10% with inventory down mid-teens. Investors will want to hear that profitability is bottoming out even as revenue continues to fall.

Third, North America momentum. Wholesale grew 11% in Q3 while Direct fell. Hill said the region saw positive growth in all channels for the first time in two years. Running was up over 20%. If those trends extend, the “Win Now” framework looks real.

Prediction markets price a 92% probability of an EPS beat, which would be the eighth quarter in a row. The harder question is the stock’s reaction. Nike has averaged a -3.71% one-week move after results.

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Contact [email protected] for any questions or corrections.

NIKE NKE shares are trading lower despite announcing that its Q4 results will include an unexpected tariff-refund benefit. However, the company clarified that, excluding this one-time benefit, Q4 results are expected to align with previous guidance rather than exceed it. Additionally, NIKE is set for a CFO transition, with David Denton stepping in on August 17, while current CFO Matthew Friend will assist until September 4. This transition adds another layer of complexity as investors weigh the short-term earnings benefit against ongoing leadership changes during a prolonged turnaround period.

Guidance Quality: NIKE's previous Q4 outlook estimated revenue between $10.65 billion and $10.87 billion, reflecting a decline of 2% to 4%, with gross margin expected to decrease by 25 to 75 basis points year-over-year. The new update does not alter this framework but adds an unquantified tariff-refund benefit. Underlying Sales Read: The prior Q4 revenue guidance included a 2-point FX benefit, indicating that the constant-currency demand remains weaker than the reported decline suggests. Turnaround Shape: Management is focusing on achieving milestones, aiming to complete "Win Now" actions by the end of calendar 2026, with gross margin expansion expected to begin in Q2 2027 and cost-reset benefits to accumulate through fiscal 2028. What is Working: North America is a bright spot, with Q3 revenue increasing by 3% and wholesale up 11%, although recovery remains uneven as Direct sales fell by 5% and Digital declined by 7%. What is Still Weak: Digital remains overly promotional globally, sportswear sales continue to struggle, Converse faced a 35% revenue decline in Q3, and Greater China is expected to remain under pressure due to reduced sell-in and marketplace cleanup. Leadership Transition: The CFO change is not linked to any disputes, and Denton brings valuable experience from CVS Health CVS and Lowe's LOW , providing CEO Elliott Hill with a finance partner skilled in cost discipline and capital allocation.The recent update from NIKE NKE offers a clearer Q4 outlook but does not address larger concerns regarding demand quality, promotional activities, and the timeline for a sustainable margin recovery. The upcoming report on June 30 will be crucial in assessing the underlying business quality, including full-price selling, inventory management, digital promotions, and whether improvements in North America's wholesale sector are translating into a healthier direct business. The CFO transition is significant, as it introduces a new finance partner during this critical reset phase, but Denton's impact will likely unfold over several quarters. A key test will be NIKE's ability to transform its milestone-based turnaround plan into a credible earnings strategy for FY27 and FY28, making the fall Investor Day a pivotal moment for establishing a more sustainable margin recovery framework.

This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].

At about $45 as of this writing, Nike (NKE 1.91%) stock trades 16% below where it did a decade ago. And shares are 44% below their 52-week high of about $80, reached last August.

In short, it's been a tough run for Nike investors. But is that about to change?

Nike reports fiscal fourth-quarter results (the period ended May 31) on June 30. It will be another test of the turnaround CEO Elliott Hill has led since returning in late 2024, a plan management calls its "Win Now" actions. The question hanging over that report is whether the beaten-down price reflects a business that is finally turning or one that is simply stuck.

Image source: Getty Images.

North America is where the comeback shows Nike's largest market is the clearest sign the plan is working. North America revenue rose 3% to about $5 billion in the fiscal third quarter (the period ended Feb. 28, 2026), led by an 11% jump in wholesale as Nike won back shelf space with retail partners. Management said sell-through grew across every channel in February for the first time in two years, with discounting easing and the digital business strengthening as the quarter went on.

"North America is leading our comeback and is well positioned to sustain the momentum as we move forward," chief financial officer Matthew Friend said on the company's fiscal third-quarter earnings call.

If that February turn holds into the fiscal fourth quarter, even as the region laps last year's heavy clearance sales, it would be real evidence Nike can grow its biggest market again.

But what about weakness in Greater China? Greater China is the other side of the story. Revenue there fell 7% to about $1.6 billion in the fiscal third quarter, and management guided for a roughly 20% drop in the fiscal fourth quarter.

That decline, however, is largely self-inflicted. Nike is deliberately shipping less product to clear out aged inventory and curb the discounting that cheapened the brand there.

As China sales shrank, the region's operating profit rose 11%, and inventory fell by more than 20% in units -- the result of reducing near-term sell-in and pulling key styles off discount instead of flooding stores with inventory.

But there are signs of progress. Nike expanded a revamped store concept to 100 locations, including a flagship in Shanghai, and said full-price selling improved.

The number to watch on June 30 isn't the 20% revenue drop itself. It is whether sell-through and full-price demand keep firming under that reduced supply.

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Checking in on gross margin Nike's gross margin slipped to 40.2% in the fiscal third quarter, down from about 41.5% a year earlier, dragged down mostly by higher U.S. tariffs that cost roughly 3 percentage points of margin on their own. Clearing unsold classic-sneaker inventory out of the market pulled about 5 points off reported revenue on top of that.

With that said, management notably guided to a much smaller margin decline in fiscal Q4 and said margins should start expanding again in the second quarter of fiscal 2027, aided by easing tariff pressure and inventory clean-up costs rolling off.

But the stock's price decline hasn't necessarily created the bargain you might imagine. Nike trades around $45, close to where it sat a decade ago, yet its price-to-earnings ratio is still about 30. This is because earnings have fallen about as fast as the stock. Indeed, net income dropped 35% in fiscal Q3.

The stock's valuation, therefore, only works if profits recover, and profits recover only if the turnaround does.

Management expects to complete its Win Now actions by the end of the calendar year and plans to lay out longer-term targets at an investor day this fall.

It has also been candid about the pace.

"This is complex work, and parts of it are taking longer than I'd like," Hill explained during its fiscal third-quarter earnings call.

I think Nike is a more investable company than it was a year ago, thanks to the stock's sharp decline this year. And a 24-year run of annual dividend increases, along with a 3.6% dividend yield as of this writing, pays shareholders to wait.

Still, I'd want the fiscal fourth-quarter numbers to confirm China is finding a floor and margins are bending back before treating this price as a real opportunity rather than a value trap. The stock is cheap for clear reasons. Whether those reasons are starting to fade will hopefully be revealed on June 30.

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David M. Denton named incoming Chief Financial Officer

BEAVERTON, Ore.--(BUSINESS WIRE)--NIKE, Inc. (NYSE:NKE) today announced that David M. Denton will join the company as Executive Vice President and Chief Financial Officer, effective August 17. Matthew Friend will step down as Executive Vice President and Chief Financial Officer at that time and remain with the company through September 4 to support an orderly transition. Friend will participate in the company’s fourth quarter fiscal 2026 earnings call on June 30, as planned.

Denton will lead Nike’s global finance organization, partnering with President and Chief Executive Officer Elliott Hill and the Senior Leadership Team to support disciplined execution, capital allocation, and long-term value creation.

“Dave is a proven public-company CFO who knows how to help great consumer brands operate with discipline and invest to win,” said Elliott Hill, President and Chief Executive Officer, NIKE, Inc. “We’re focused on doing what Nike does best: serving athletes, leading with sport and building the most innovative products in the world. Dave’s experience, judgment, and operating rigor will help us execute against these priorities with consistency and build on the progress underway.”

Denton joins Nike from Pfizer, Inc., where he has served as Chief Financial Officer and Executive Vice President since May 2022. He brings more than 30 years of finance and operating leadership experience across complex global public companies. Prior to Pfizer, Denton served as Chief Financial Officer and Executive Vice President of Lowe’s Companies, Inc. from 2018 to 2022, where he oversaw finance, strategy, and other enterprise functions while helping advance the company’s transformation and growth priorities. Earlier in his career, he spent two decades at CVS Health Corporation, including as Executive Vice President and Chief Financial Officer, where he helped guide the company’s evolution into a diversified health solutions organization. Denton also brings public company governance experience having previously served on the Boards of Directors of Haleon (2023–2024) and Tapestry (2014–2023) and is expected to serve on the Board of Honeywell Aerospace following its planned spin-off from Honeywell.

“Nike is one of the world’s great brands, with extraordinary strengths in sport, innovation, and global scale,” said Denton. “I’m excited to partner with Elliott and the leadership team to support the company’s priorities, invest with discipline, and help deliver sustainable long-term value as Nike continues to lead with sport and serve athletes around the world.”

"This is a natural moment for a leadership transition as we move from foundational actions to sustained growth through our Sport Offense operating model,” added Hill. “I’d like to thank Matt for his many contributions to Nike over the years. He has dedicated a significant part of his career to this company and has been a valued colleague and partner to many across Nike. We are grateful for his service, appreciate his commitment to ensuring a seamless transition, and wish him all the best in his next chapter.”

NIKE, Inc. Provides Update on Expected Fourth Quarter Fiscal 2026 Results

As previously announced, NIKE, Inc. will report fourth quarter and fiscal year 2026 results on Tuesday, June 30th at 2:00 p.m. PT. These results will include a benefit from tariff refunds that was not contemplated in the company’s previously provided guidance. Excluding this one-time benefit, fourth quarter results are expected to be generally in line with previously provided guidance.

About NIKE, Inc.

NIKE, Inc., headquartered in Beaverton, Oregon, is the world's leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Converse, a wholly-owned NIKE, Inc. subsidiary brand, designs, markets and distributes athletic lifestyle footwear, apparel and accessories. For more information, NIKE, Inc.’s earnings releases and other financial information are available on the Internet at https://investors.nike.com/. Individuals can also visit https://about.nike.com/ and follow NIKE on LinkedIn, Instagram and YouTube.

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