By now, Nike (NKE -2.66%) shareholders are well aware that the company's fiscal 2027 could be a tough stretch. In the company's 2027 first-quarter earnings report, revenue fell 4% year over year to $11.2 billion, and net income slid 2% to $712 million. The athletic wear giant has been in the midst of a turnaround plan for several years now, and its first-quarter results show it's still a work in progress.
That said, aside from slumping sales and regaining relevance, Nike is also dealing with an expectation problem from the market. That's because instead of returning to growth-stock status, the iconic shoemaker may start to look more like an income stock. So, what's an investor to do?
Image source: The Motley Fool.
The struggles of an iconic brand
Over the years, Nike has made a series of missteps that have contributed to the stock's woes. Instead of making its products more widely available, it decided to focus more on selling directly to customers, shunning wholesalers. The brand also stagnated and felt less innovative amid a new wave of competition from brands like On Holding.
In addition, its Converse brand is struggling, with first-quarter sales of $263 million, down 28%. Even more worrisome were sales in Greater China, down 22% to $1.1 billion. On the earnings call for the quarter, CEO Elliott Hill acknowledged the company's struggles and the need to innovate, saying, "Yes, the consumer is cautious. But as the leader in the industry, it's on us to bring more creativity to sportswear."
That innovation will be important in bringing back former customers and attracting new ones, and Nike is making progress in rebuilding its wholesale pipeline. In the first quarter, sales to wholesale customers in North America totaled $2.9 billion, up 9%. For investors, however, there's an even more important element to consider before investing in Nike.
NKE Nike$37.30-$1.02 (-2.66%)
NYSE · As of 4:00 PM ET 10/23/26
No longer a growth stock
In the fourth quarter of 2021, Nike reported revenue of $12.3 billion, a 96% increase from the prior-year period. That type of performance sets high expectations, and, looking ahead, that level of sales growth doesn't seem repeatable in the near future, nor may it ever return to that level. That said, it doesn't mean Nike can't still reward long-term investors as a more mature company.
While the retailer may lack in sales growth, it's still a dividend payer, with a dividend yield of 4.3%. Granted, there's always a worry about the stability of dividend payouts when a company's sales and revenue are declining, but Nike remains profitable, with total cash of $8.3 billion against a manageable $11.1 billion in debt. Nike is also committed to its dividend payout, with CFO David Denton saying in the Q1 2027 earnings call that "under all scenarios, we have support for maintaining and ultimately growing the dividend over time."
This means that anyone who invests in Nike, hoping it will return to the years when it was posting massive sales growth, will likely be disappointed. But what it also means is that those who understand its evolution into an income stock could be rewarded.
Before investing, however, I would want to see Nike reverse its sales decline and reach a point where it is, even if only modestly, in a position to update its revenue forecast because it's making more money than expected. Again, we shouldn't expect massive sales growth, but Nike needs to find its footing and spark consumer enthusiasm again. If it doesn't, the stock price may keep declining, cutting into the income generated by those dividend payouts.
If it can get back on track, the stock price can stabilize, and long-term investors can be rewarded with solid income for years.
Nike (NKE - Free Report) ended the recent trading session at $37.30, demonstrating a -2.66% change from the preceding day's closing price. The stock trailed the S&P 500, which registered a daily loss of 0.52%. At the same time, the Dow lost 1.24%, and the tech-heavy Nasdaq lost 0.21%.
Heading into today, shares of the athletic apparel maker had gained 6.47% over the past month, outpacing the Consumer Discretionary sector's gain of 4.8% and the S&P 500's loss of 1.21%.
The investment community will be paying close attention to the earnings performance of Nike in its upcoming release. The company is predicted to post an EPS of $0.36, indicating a 32.08% decline compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $11.22 billion, indicating a 9.71% decline compared to the corresponding quarter of the prior year.
For the full year, the Zacks Consensus Estimates project earnings of $1.25 per share and a revenue of $42.75 billion, demonstrating changes of -20.89% and -7.86%, respectively, from the preceding year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Nike. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 27.02% lower. Nike presently features a Zacks Rank of #5 (Strong Sell).
Investors should also note Nike's current valuation metrics, including its Forward P/E ratio of 30.68. This signifies a premium in comparison to the average Forward P/E of 12.67 for its industry.
Also, we should mention that NKE has a PEG ratio of 4.37. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Shoes and Retail Apparel was holding an average PEG ratio of 1.41 at yesterday's closing price.
The Shoes and Retail Apparel industry is part of the Consumer Discretionary sector. This industry, currently bearing a Zacks Industry Rank of 233, finds itself in the bottom 6% echelons of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
BEAVERTON, Ore.--(BUSINESS WIRE)--NIKE, Inc. (NYSE: NKE) plans to host an Investor Day on November 16–17, 2026. Due to limited capacity, in-person attendance is by invitation only. The main stage presentations on Tuesday, November 17, 2026, will be webcast live beginning at approximately 8:30 a.m. PT and are expected to conclude at approximately 12:00 p.m. PT at https://investors.nike.com/. A replay of the webcast and related materials will be available at the same location following the event.
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.
A selloff hitting premium athletic apparel brands at more than twice the pace of the broader retail sector is raising uncomfortable questions about whether shoppers are pulling back on discretionary spending just as the crucial holiday quarter approaches.
Athletic apparel is taking the hardest hit in a retail selloff that’s spreading well past any single brand, with premium and performance names sliding at more than twice the pace of the broader sector. Shares of Lululemon Athletica (NASDAQ:LULU | LULU Price Prediction) fell 4% to $100.35, extending a 2026 slide that has already erased more than half of the stock’s value.
Meanwhile, Under Armour (NYSE:UAA) shares are down 4% to $4.68. Under Armour stock trades far below Lululemon’s share price. Yet, the percentage hit is nearly identical, a sign the selling is landing across the whole athletic apparel group.
The SPDR S&P Retail ETF (NYSEARCA:XRT) is down 2% to $87.55, a smaller decline that still shows the pressure reaching well beyond athletic apparel. Broader indexes are holding up better, as the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is down 0.4% to $760.81.
Selling Spreads Across Discretionary Retail
Lululemon and Under Armour shares are falling harder than the sector fund, and neither has issued a fresh announcement, so the pressure traces to the broader group. Fellow athletic brand Nike (NYSE:NKE) competes for the same active-lifestyle shoppers, keeping the wider footwear and apparel group tied to consumer spending questions. NKE shares are down 2% to $37.54.
Spending data offers a contrast: U.S. retail sales rose 0.8% in September to $745 billion. That strength leaves the selloff driven by sentiment toward premium apparel, where shoppers can easily delay purchases.
Premium Athleisure Meets Performance Wholesale
Lululemon sells premium yoga and athleisure apparel largely through its own stores and website, which ties its revenue directly to full-price shopper traffic. Under Armour leans more on wholesale partners and performance sportswear, so its results also hinge on how department stores and sporting goods chains manage their inventory. This difference shapes how quickly each company feels a pullback in discretionary spending, with Lululemon seeing it at its own registers first.
In its Q2 FY2026 report, Lululemon posted revenue of $2.42 billion, down 4.3% year over year, as Americas comparable sales fell 12%. Management lowered full-year guidance to a revenue decline of 5% to 7%. CFO Meghan Frank stated, “While we continue to navigate some challenging dynamics, we are taking a prudent approach with our revised full-year outlook.”
Key drivers for Lululemon include international store expansion, a buyback that retired 2.7 million shares for $330 million, and incoming CEO Heidi O’Neill, named in the September report. For Under Armour, the bull case rests on its multi-year restructuring plan and premium push, while the downside risk remains the same soft North American demand.
Holiday Demand Sets Lululemon’s Next Test
The next test for Lululemon is whether holiday demand for premium athleisure holds up. Lululemon’s Q3 FY2026 results will reveal if the company can land inside its guided revenue range of $2.29 billion to $2.32 billion, a decline of 10% to 11%. Such a steep guided decline sets a modest bar, giving Lululemon room to show recovery if Americas demand firms up.
Under Armour’s open variable is wholesale reordering through year-end, since retail partners lock in holiday inventory well before shoppers arrive, and traders can watch for whether movement in the SPDR S&P Retail ETF shows the selling losing breadth across discretionary retail.
Shares of Lululemon already reflect heavy pessimism about the Americas business after the 2026 decline. Investors weighing their exposure should adjust their LULU stock holdings carefully given the reduced guidance showing weak demand hasn’t run its course ahead of the holiday-quarter results.
Contact [email protected] for any questions or corrections.
Nike (NKE +2.10%) may be the biggest and most well-known athletic wear company in the world, but its stock has plummeted over the past few years. It made a series of missteps that led to declining sales and losing some of its cachet, and it's still struggling to get back to dominance.
The stock is a crushing 79% off its all-time high, but it's up 17% from its 52-week low. Is the turnaround finally gaining steam? And, more importantly for investors, is now the time to buy?
Can Nike just do it?
Nike has been dealing with declining revenue for more than two years now, with some bright pockets. That's a long stretch for what's supposed to be the industry leader.
Image source: Nike.
In the most recent quarter, the fiscal 2027 first quarter (ended Aug. 31), sales were down 4% from last year, but that's less than some of its earlier quarters. Gross margin, which had been narrowing, expanded 0.6 points to 42.8%. Earnings per share (EPS) were $0.48, down from $0.49 last year, but higher than the $0.44 expected by Wall Street. The market liked the report, and the stock has been climbing ever since.
There's a long road ahead, but there have been many signs of progress. Running was up double digits in the first quarter, as was the U.S. basketball business, and global football ( soccer). Nike had fallen behind in its sport lines, and it's making its way back.
Some of Nike's problems stemmed from a lack of innovation in sportswear, and it's committed to restarting that engine, creating newness more frequently. Two of its running-inspired sportswear shoes, the P-6000 and the V5 Runner, grew by double digits in the quarter, and its newly launched Studio Fleece line was its best-performing apparel line. CEO Elliott Hill attributed the success to clarity, meaning determining each target clientele's specific needs and serving them.
Big problems remain
Hill said that Nike is going to shrink some of its largest franchises, like the Jordan brand, which is oversupplied and doesn't feel premium anymore. That is likely to lead to sales declines in these franchises in the beginning, before stabilizing, and that could be a drag on short-term growth.
But there are bigger problems that remain, notably China, which is one of its biggest and most important markets. Sales have been dropping precipitously in the region and fell 26% year over year in the first quarter. There is stiff competition from local brands, and Nike is aiming to clean up the business by tightening control over distribution to heighten the premium brand. It's stopping distribution through third-party online sellers, and it's developing lines to cater to the Chinese consumers.
NKE Nike$38.32+$0.79 (+2.10%)
NYSE · As of 4:00 PM ET 10/22/26
However, that sounds strangely similar to some of the moves that brought it to this moment in the first place; under previous leadership, it curtailed relationships with wholesale partners and focused on its own direct-to-consumer channels, and customers found other brands, like On Holding and Berkshire Hathaway's Brooks at retailers instead. Will it have different results in China? Only time will tell.
Risks vs. reward
At the current price, Nike stock trades at a P/E ratio of 18, near its lowest level in 10 years. However, there's good reason for that. At this price, though, its dividend yields 4.3%, which is excellent for passive income investors.
Management is still projecting a high single-digit decline in fiscal 2027, so there isn't much to be hopeful about in the near future. Considering its array of challenges, investors may want to hold off on buying Nike stock, even at this cheap price. I'd wait for more progress, especially on the China business, before saying that this is a bargain.
NKE's digital sales slump and DTC weakness in Greater China raise concerns over its growth strategy as marketplace restructuring pressures near-term performance.
Nike (NKE - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this athletic apparel maker have returned +4.1%, compared to the Zacks S&P 500 composite's no change. During this period, the Zacks Shoes and Retail Apparel industry, which Nike falls in, has gained 4%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Nike is expected to post earnings of $0.36 per share, indicating a change of -32.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -30.8% over the last 30 days.
The consensus earnings estimate of $1.25 for the current fiscal year indicates a year-over-year change of -20.9%. This estimate has changed -27% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $1.56 indicates a change of +24.8% from what Nike is expected to report a year ago. Over the past month, the estimate has changed -31.8%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #5 (Strong Sell) for Nike.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Nike, the consensus sales estimate of $11.22 billion for the current quarter points to a year-over-year change of -9.7%. The $42.75 billion and $43.11 billion estimates for the current and next fiscal years indicate changes of -7.9% and +0.8%, respectively.
Last Reported Results and Surprise HistoryNike reported revenues of $11.21 billion in the last reported quarter, representing a year-over-year change of -4.3%. EPS of $0.48 for the same period compares with $0.49 a year ago.
Compared to the Zacks Consensus Estimate of $11.4 billion, the reported revenues represent a surprise of -1.65%. The EPS surprise was +11.63%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates three times over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Nike is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Nike. However, its Zacks Rank #5 does suggest that it may underperform the broader market in the near term.
Nike (NKE -0.92%), one of the blue chip dividend stocks, has raised its dividend for 24 consecutive years. It also has a forward yield of 4.4%, making it a dividend stock with a moderately high yield. That yield may look like an opportunity, but it's more likely a warning sign.
Why? With earnings forecasts unable to cover the dividend until at least 2027, shares remain at high risk of a dividend cut. As low-risk 10-year Treasuries yield over 5% and Nike's turnaround timeline remains highly uncertain, the risk simply isn't worth the payoff for dividend investors for now.
Image source: Getty Images.
What it takes to earn $2,000 in annual dividends from Nike shares
Based on Nike's current quarterly dividend of $0.41 per share, the stock pays $1.64 per share annually. To generate $2,000 in annual dividend income, you would need to own around 1,220 shares. At today's stock price, it would require a $45,445 investment. However, putting that amount of capital to work in Nike shares requires taking current interest rate trends into account.
With the 10-year Treasury yielding around 5.15%, you could generate $2,340 per year, or an additional 17%, from this low-risk alternative. Even as Treasuries lack the long-term upside that stocks typically provide, consider the root cause of Nike steadily moving toward becoming one of the high-yield dividend stocks in the first place.
That would be the stock's 77% price drop over the last five years, coupled with continued dividend raises. Management has prioritized cash payouts, even as numerous headwinds and turnaround challenges continued to hinder the company's fiscal results.
NKE Nike$37.53-$0.35 (-0.92%)
NYSE · As of 4:00 PM ET 10/21/26
Uncertain turnaround prospects call into question making this a buy
For years, issues ranging from growing competition in China to the impact of inflation and tariffs on production costs have affected Nike's operating performance. As dividends kept rising, shares remain at risk of a further dive if management decides to reduce or eliminate it to conserve cash.
Although management remains highly committed to maintaining the dividend, given how it's expected to exceed estimated earnings in both 2026 and 2027, something may have to give. At the very least, the company needs to go from having a few green shoots, such as strengthening North American sales, to stabilizing and improving overall results.
All this said, Nike's management could prove me wrong as soon as November. That's when the company announces dividend increases. If management implements a meaningful increase, it could suggest strong results ahead when Q3 2026 results come out in December. However, if management implements a $0.01-dividend increase to maintain its dividend growth streak while conserving cash, it could be a warning sign of more trouble ahead.
Moreover, if you are approaching Nike as one of the dividend stocks to buy and hold, I would at least wait until the December earnings report. Even if shares rise in response to improved results, much of the underlying uncertainty will have cleared by then.
At the same time, it's not as if shares are going to make a full recovery on this news alone. Post-rally, there could still be an opportunity to scoop up this blue chip while it sports an above-average yield and improved long-term prospects to boot.
Nike's stock has fallen for years, dragged lower by downbeat results, disappointing outlooks and a challenging macroeconomic backdrop. That has set up a situation where it looked like investors were awaiting clear signs of a turnaround before getting back on board—a prudent approach to a beaten-down stock.
LULU's North American sales slump, weak leggings demand and rising competition threaten its turnaround, while product innovation aims to revive growth momentum.
Nike (NYSE: NKE) stock has suffered a steep decline in 2026, but historical data suggests the shares could be poised for a recovery in November.
Notably, Nike stock has historically gained an average of 4.48% between November 14 and December 4, closing higher in all 10 years examined by SeasonalityX. However, the 100% historical win rate does not guarantee similar returns in 2026.
The data identified 676 recurring seasonal windows over the past decade, including 393 bullish and 283 bearish patterns. The October 31 to November 10 window delivered an average return of 1.45%, with an 80% win rate.
Nike seasonality chart. Source: SeasonalityX November 1 to December 1 recorded an average return of 6.19%, while November 2 to December 2 returned 6.25%. Both windows had 90% win rates.
These patterns point to potential seasonal upside, although Nike’s fundamentals remain under pressure. The stock rose 0.22% in the latest session to close at $37, while remaining down 41% year to date. Indeed, Nike is trading well below its 52-week high of $70.44.
NKE YTD stock price chart. Source: Google Finance Nike’s fiscal Q1 2027 revenue fell 4% year over year to $11.21 billion, while Greater China sales plunged 26%, marking nine consecutive quarters of declines. Intensifying local competition, weaker demand, and sluggish Sportswear and Jordan Brand sales have weighed on growth and pricing power.
Nike Direct revenue fell 6% to $17.7 billion in fiscal 2026, while digital sales declined 12%. In Q1 FY2027, Nike Direct revenue fell another 8% and digital sales dropped 13%.
Nike’s management focus Management is refocusing on performance sports and rebuilding wholesale relationships. Nike also plans to end online sales arrangements with some major Chinese retail partners in early 2027 to regain control over distribution and pricing, although the changes could pressure near-term revenue.
At the moment, Nike expects fiscal 2027 revenue to decline at a high-single-digit rate. Its Pace restructuring program is expected to deliver $2.5 billion in cumulative savings through fiscal 2031, although additional restructuring charges are expected.
Despite weak sales, Nike retains a strong global brand, an established distribution network, and $8.4 billion in cash and short-term investments as of August 2026.
The company generated $46.4 billion in fiscal 2026 revenue, while performance footwear and North America have shown relative resilience. The 2026 FIFA World Cup also offered an opportunity to boost football product sales.
Nike’s gross margin rose 60 basis points year over year to 42.8% in fiscal Q1 2027, but stronger demand, less discounting and sustained cash generation are needed to confirm a recovery.
Featured image via Shutterstock
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It's been a rough year for Nike (NKE +0.21%) shareholders, with the stock price diving 41.7% as of this writing. It's been even rougher for anyone holding shares over the past five years, with the stock price down 76.5%.
That said, as a profitable company with an iconic brand and a turnaround plan, Nike would appear to be a rebound candidate. Looking at what's ahead, however, shows that may just be irrationally optimistic thinking.
Image source: The Motley Fool.
The troubles at Nike Over the years, Nike has faced headwinds due to a combination of a lack of innovation, failing to keep up with changing consumer tastes, and shunning wholesalers in favor of selling directly to consumers. In addition, it's struggling to find its footing in China, with total sales of $1.1 billion for its Greater China segment in the first quarter of fiscal 2027 down 22% from the prior-year period.
Looking at the business as a whole in that first quarter, sales of $11.2 billion were down 4%, while net income of $712 million was down 2%. So not only is the company bringing in less revenue, but it's also keeping less of what it's making. In a nod to a potential continued sales slump, Nike expects its fiscal 2027 full-year revenue to decline by a high-single-digit percentage. With all those challenges, Nike's stock price has had no room to do anything other than fall.
NKE Nike$37.21+$0.08 (+0.21%)
NYSE · As of 4:00 PM ET 10/19/26
What this means for investors With sales expected to decline in 2027, there's more room for things to get worse. There don't appear to be any near-term catalysts that could reignite investor enthusiasm, aside from meaningfully beating earnings forecasts in one of its upcoming quarters, which seems unlikely. Nike is planning to cut 1,400 jobs, which could lower costs, but that still won't boost sales or make shoppers excited to buy Nike products again.
Overall, at this point, investing in Nike in hopes of a turnaround is both a risk and an opportunity cost. Other companies are more likely to reward shareholders, and those potential gains could be missed if money is tied up in Nike stock, waiting for a turnaround.
Columbia Asset Management boosted its position in shares of NIKE, Inc. (NYSE:NKE – Free Report) by 18.7% in the 3rd quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The institutional investor owned 122,374 shares of the footwear maker’s stock after buying an additional 19,237 shares during the period. Columbia Asset Management’s holdings in NIKE were worth $4,332,000 at the end of the most recent quarter.
Other large investors also recently bought and sold shares of the company. Sankala Group LLC purchased a new stake in NIKE in the fourth quarter valued at $26,000. Scarborough Advisors LLC acquired a new position in shares of NIKE in the 1st quarter valued at $25,000. Meeder Asset Management Inc. grew its holdings in shares of NIKE by 108.4% during the 1st quarter. Meeder Asset Management Inc. now owns 548 shares of the footwear maker’s stock worth $29,000 after purchasing an additional 285 shares during the period. Atlas Wealth LLC purchased a new position in NIKE during the first quarter worth about $31,000. Finally, SHP Wealth Management purchased a new position in NIKE during the fourth quarter worth about $41,000. Hedge funds and other institutional investors own 64.25% of the company’s stock.
NIKE Stock Performance NYSE:NKE opened at $37.22 on Tuesday. The firm’s fifty day moving average price is $37.38 and its 200 day moving average price is $41.45. NIKE, Inc. has a 1-year low of $31.97 and a 1-year high of $70.44. The company has a debt-to-equity ratio of 0.39, a current ratio of 2.07 and a quick ratio of 1.39. The firm has a market cap of $55.29 billion, a price-to-earnings ratio of 17.90, a price-to-earnings-growth ratio of 4.19 and a beta of 1.09.
NIKE (NYSE:NKE – Get Free Report) last announced its quarterly earnings data on Thursday, October 1st. The footwear maker reported $0.48 EPS for the quarter, beating analysts’ consensus estimates of $0.43 by $0.05. NIKE had a net margin of 6.74% and a return on equity of 15.94%. The firm had revenue of $11.21 billion during the quarter, compared to the consensus estimate of $11.32 billion. During the same quarter last year, the firm earned $0.49 earnings per share. The firm’s revenue was down 4.3% compared to the same quarter last year. NIKE has set its FY 2027 guidance at 1.150-1.350 EPS. On average, sell-side analysts expect that NIKE, Inc. will post 1.26 EPS for the current year. NIKE Dividend Announcement The company also recently declared a quarterly dividend, which was paid on Thursday, October 1st. Stockholders of record on Tuesday, September 1st were issued a dividend of $0.41 per share. The ex-dividend date was Tuesday, September 1st. This represents a $1.64 dividend on an annualized basis and a dividend yield of 4.4%. NIKE’s payout ratio is 78.85%.
Wall Street Analysts Forecast Growth A number of brokerages recently weighed in on NKE. Barclays set a $37.00 price objective on shares of NIKE and gave the company an “overweight” rating in a report on Monday, October 5th. The Goldman Sachs Group reaffirmed a “neutral” rating and set a $30.00 target price (down from $38.00) on shares of NIKE in a research note on Friday, October 2nd. Wall Street Zen downgraded NIKE from a “hold” rating to a “sell” rating in a research report on Saturday, October 3rd. Telsey Advisory Group set a $35.00 price objective on shares of NIKE and gave the company a “market perform” rating in a report on Friday, October 2nd. Finally, Argus raised shares of NIKE to a “strong-buy” rating in a research report on Wednesday, July 15th. One investment analyst has rated the stock with a Strong Buy rating, seven have assigned a Buy rating, twenty-one have given a Hold rating and ten have assigned a Sell rating to the stock. According to data from MarketBeat, the company has an average rating of “Reduce” and an average price target of $41.07.
Check Out Our Latest Research Report on NIKE
Key NIKE News Here are the key news stories impacting NIKE this week:
Positive Sentiment: An analyst argues that Nike’s recent product-development weakness is recoverable and that the shares are undervalued after a steep decline from their peak. This provides a potential re-rating catalyst if new products and sales trends improve. Analyst says Nike will recover and shares are undervalued Positive Sentiment: Nike’s roughly 4.4% dividend yield and share price well below its historical peak may attract income-oriented and value investors, particularly if the company can stabilize earnings and maintain the payout. Coca-Cola and Nike high-yield dividend comparison Neutral Sentiment: Nike was included in recent luxury-goods and apparel-stock watchlists, increasing visibility but offering no new company-specific catalyst or change to its fundamentals. Top Luxury Goods Stocks To Watch Best Apparel Stocks Worth Watching Negative Sentiment: Zacks issued a negative forecast for Nike’s earnings, reinforcing concerns about slower demand, product execution and near-term profit growth. This contrasts with the longer-term recovery thesis and may limit upside until earnings estimates improve. Zacks Research Issues Negative Forecast for NIKE Earnings Negative Sentiment: A separate dividend comparison favored Coca-Cola over Nike, suggesting investors may view Nike’s higher yield as compensation for greater business and earnings risk rather than as a clear buy signal. Why only one high-yield dividend stock is a buy Insiders Place Their Bets In related news, COO Venkatesh Alagirisamy sold 3,671 shares of the company’s stock in a transaction on Wednesday, September 9th. The stock was sold at an average price of $37.59, for a total value of $137,992.89. Following the completion of the transaction, the chief operating officer directly owned 104,862 shares in the company, valued at approximately $3,941,762.58. This represents a 3.38% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Matthew Friend sold 2,463 shares of the stock in a transaction that occurred on Wednesday, August 5th. The stock was sold at an average price of $41.60, for a total transaction of $102,460.80. Following the transaction, the chief financial officer directly owned 82,165 shares in the company, valued at approximately $3,418,064. This represents a 2.91% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 14,974 shares of company stock worth $600,126 over the last ninety days. Company insiders own 1.10% of the company’s stock.
About NIKE (Free Report)
NIKE, Inc is a global athletic footwear, apparel, equipment and accessories company headquartered near Beaverton, Oregon. The company designs, develops, markets and sells products under the Nike, Jordan and Converse brands, serving athletes and consumers across a broad range of sports and lifestyle categories.
NIKE’s product portfolio includes athletic and casual footwear, performance and lifestyle apparel, sports equipment, accessories and digital fitness-related offerings. The company distributes its products through company-owned retail stores, digital platforms and wholesale partners, while also operating direct-to-consumer and membership programs.
The company traces its origins to 1964, when Phil Knight and Bill Bowerman founded Blue Ribbon Sports.
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TD Waterhouse Canada Inc. trimmed its position in NIKE, Inc. (NYSE:NKE – Free Report) by 16.2% during the third quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission (SEC). The institutional investor owned 326,785 shares of the footwear maker’s stock after selling 63,398 shares during the period. TD Waterhouse Canada Inc.’s holdings in NIKE were worth $11,463,000 at the end of the most recent quarter.
Several other institutional investors and hedge funds also recently modified their holdings of NKE. OneDigital Investment Advisors LLC boosted its holdings in shares of NIKE by 32.8% in the 2nd quarter. OneDigital Investment Advisors LLC now owns 244,296 shares of the footwear maker’s stock valued at $10,028,000 after buying an additional 60,375 shares during the last quarter. Douglas Lane & Associates LLC grew its stake in shares of NIKE by 57.7% in the third quarter. Douglas Lane & Associates LLC now owns 1,521,611 shares of the footwear maker’s stock valued at $53,865,000 after buying an additional 556,798 shares in the last quarter. B.A. Schrock Wealth Management Inc. acquired a new position in NIKE during the third quarter worth $1,153,000. Quantitative Investment Management LLC acquired a new position in NIKE during the second quarter worth $2,459,000. Finally, Deutsche Bank AG raised its position in NIKE by 8.0% during the second quarter. Deutsche Bank AG now owns 3,566,634 shares of the footwear maker’s stock worth $146,410,000 after acquiring an additional 264,576 shares in the last quarter. 64.25% of the stock is owned by institutional investors and hedge funds.
NIKE News Roundup Here are the key news stories impacting NIKE this week:
Positive Sentiment: Jordan is gaining traction in resale markets. Citi-tracked data showed Nike held 72.3% of athletic-footwear resale volume in September, up from August, with the Jordan brand responsible for most of the improvement. This suggests continued consumer demand for key franchises. Jordan is driving Nike’s resale volume growth Positive Sentiment: India represents a long-term growth opportunity. Nike is expanding its India presence with a new campus as it seeks to diversify growth beyond weaker markets, particularly China. Investors may view the move as a potential structural growth driver, although the payoff is likely several years away. Nike’s India campus is a long-term growth bet Neutral Sentiment: Investor flows have recently supported the stock. Nike has benefited from a rotation out of expensive technology and artificial-intelligence stocks into beaten-down consumer companies. Unusually high call-option activity also points to speculative interest, but these factors may not reflect improvement in Nike’s underlying fundamentals. Nike gets a lift as traders flee AI stocks Negative Sentiment: Wall Street remains cautious about the turnaround. Only about 26% of analysts reportedly rate Nike a Buy, amid concerns about declining global sales, especially in China. Management’s restructuring is intended to reduce costs and accelerate decisions, but it also underscores the depth of the company’s operating problems. Just 26% of Wall Street analysts rate Nike a Buy Negative Sentiment: Distribution and dividend concerns add pressure. Reports say Nike has not fully recovered shelf space lost after reducing its Foot Locker relationship. Separately, weakening sales and free cash flow that may not cover the dividend raise questions about the sustainability of Nike’s long record of payout increases. Nike walked away from Foot Locker NIKE Stock Down 0.0% NKE stock opened at $37.12 on Monday. The company has a current ratio of 2.07, a quick ratio of 1.39 and a debt-to-equity ratio of 0.39. The firm has a market capitalization of $55.13 billion, a PE ratio of 17.85, a PEG ratio of 4.19 and a beta of 1.09. NIKE, Inc. has a 1-year low of $31.97 and a 1-year high of $70.44. The business’s 50 day simple moving average is $37.48 and its 200 day simple moving average is $41.56. NIKE (NYSE:NKE – Get Free Report) last posted its quarterly earnings results on Thursday, October 1st. The footwear maker reported $0.48 earnings per share for the quarter, beating analysts’ consensus estimates of $0.43 by $0.05. NIKE had a return on equity of 15.94% and a net margin of 6.74%. The business had revenue of $11.21 billion for the quarter, compared to analysts’ expectations of $11.32 billion. During the same quarter in the prior year, the business earned $0.49 EPS. The firm’s revenue for the quarter was down 4.3% on a year-over-year basis. NIKE has set its FY 2027 guidance at 1.150-1.350 EPS. As a group, research analysts anticipate that NIKE, Inc. will post 1.26 EPS for the current year.
NIKE Announces Dividend The business also recently disclosed a quarterly dividend, which was paid on Thursday, October 1st. Shareholders of record on Tuesday, September 1st were issued a $0.41 dividend. This represents a $1.64 annualized dividend and a dividend yield of 4.4%. The ex-dividend date was Tuesday, September 1st. NIKE’s payout ratio is currently 78.85%.
Wall Street Analysts Forecast Growth A number of brokerages have commented on NKE. BNP Paribas Exane set a $19.00 price target on shares of NIKE and gave the company an “underperform” rating in a research note on Friday, October 2nd. Evercore decreased their price objective on shares of NIKE from $46.00 to $28.00 in a research report on Monday, September 28th. Jefferies Financial Group set a $60.00 price objective on shares of NIKE in a research note on Friday, October 2nd. HSBC dropped their target price on shares of NIKE from $48.00 to $40.00 and set a “hold” rating on the stock in a report on Monday, September 28th. Finally, JPMorgan Chase & Co. dropped their target price on shares of NIKE from $40.00 to $33.00 and set an “underweight” rating on the stock in a report on Friday, October 2nd. One analyst has rated the stock with a Strong Buy rating, seven have given a Buy rating, twenty-one have issued a Hold rating and ten have assigned a Sell rating to the company. According to data from MarketBeat, the stock has an average rating of “Reduce” and a consensus price target of $41.07.
Get Our Latest Stock Report on NKE
Insider Activity at NIKE In other news, EVP Philip McCartney sold 2,559 shares of the firm’s stock in a transaction dated Wednesday, September 9th. The shares were sold at an average price of $37.59, for a total transaction of $96,192.81. Following the completion of the sale, the executive vice president owned 78,121 shares in the company, valued at approximately $2,936,568.39. This trade represents a 3.17% decrease in their position. The transaction was disclosed in a filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Amy Montagne sold 4,867 shares of NIKE stock in a transaction dated Friday, August 7th. The stock was sold at an average price of $42.05, for a total transaction of $204,657.35. Following the sale, the insider directly owned 57,436 shares of the company’s stock, valued at $2,415,183.80. The trade was a 7.81% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 14,974 shares of company stock valued at $600,126 in the last ninety days. Company insiders own 1.10% of the company’s stock.
NIKE Profile (Free Report)
NIKE, Inc is a global athletic footwear, apparel, equipment and accessories company headquartered near Beaverton, Oregon. The company designs, develops, markets and sells products under the Nike, Jordan and Converse brands, serving athletes and consumers across a broad range of sports and lifestyle categories.
NIKE’s product portfolio includes athletic and casual footwear, performance and lifestyle apparel, sports equipment, accessories and digital fitness-related offerings. The company distributes its products through company-owned retail stores, digital platforms and wholesale partners, while also operating direct-to-consumer and membership programs.
The company traces its origins to 1964, when Phil Knight and Bill Bowerman founded Blue Ribbon Sports.
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According to S&P Global's Global Market Intelligence, more than 80% of the companies in the S&P 500 index pay a dividend. Because the opportunity set is large, income-focused investing is a popular strategy among the retail crowd.
It makes sense why. Investing in growth stocks means betting on future earnings that may or may not materialize. Value investing, on the other hand, relies on the market eventually agreeing with your assessment of a particular bargain opportunity. There is uncertainty with these strategies.
Dividends provide a cash inflow to investors in up and down markets. And if you reinvest these distributions, it can boost the total return.
But it's important to understand that not all dividends are created equal. It all depends on the business that's backing them. Two consumer stocks help explain this line of thinking.
Coca-Cola (KO +2.06%) shares pay a dividend yield of 2.3%. Nike (NKE -0.03%) stock pays a dividend yield of 4.4%. Here's why only one of these dividend stocks is a better buy in October.
Image source: The Motley Fool.
Both companies have remarkable dividend streaks It's a good idea to first establish why these companies are elite at returning capital to shareholders. They both have incredible dividend streaks going right now.
Coca-Cola has raised its dividend for 64 consecutive years. That makes it a Dividend King, a business with at least 50 straight years of dividend increases.
That streak says nothing of the magnitude of the hikes. In the past decade, the beverage stock's dividend has grown by 51%.
Nike has raised its dividend for 24 straight years. That's a shorter streak than Coca-Cola's, but still an impressive one. If history is any indication, the sportswear company will raise the payout later this year.
Nike's dividend growth has been better than Coca-Cola's. The former's payouts have risen by 128% over the last 10 years.
NKE Nike$37.13-$0.01 (-0.03%)
NYSE · As of 4:00 PM ET 10/16/26
It depends on what you care about most When choosing which of these two stocks is the better buy in October, investors need to take some critical information into account. It comes down to business quality.
Both Coca-Cola and Nike possess wide economic moats. The soft drink giant has one of the strongest brands on Earth that drives customer loyalty and pricing power. The sportswear leader, which has admittedly struggled in recent years, has also been a globally recognized brand for decades.
If you're primarily chasing the highest yield, Nike is clearly the better option. For a $100 investment, its dividend payout is nearly double that of Coca-Cola.
The trade-off is that Nike's fundamentals have proven significantly more volatile than those of the beverage king. This is reflected in Nike's stock performance, as it trades 79% off its peak from November 2021.
Nike is in the middle of a major turnaround effort as it aims to win back consumers. Sales have been under pressure and are set to decline this fiscal year, according to management. Persistent inflationary pressures in the U.S. don't help. The intensely competitive nature of the industry also makes things extremely difficult, as customers direct their attention and money toward newer footwear purveyors.
If safety is your main concern, go with Coca-Cola. Its dividend streak has survived recessions, inflation spikes, and shifting consumer tastes. That durability comes from the steady nature of the business itself. This is a boring operation that doesn't change much over time. And demand has proven to be stable regardless of economic conditions.
Coca-Cola's sizable profits and free cash flow enable shareholder payouts. It posted a fantastic operating margin of 34.9% in the second quarter (ended July 3), a figure up slightly from the year-ago period. That financial security blanket forces me to lean toward Coca-Cola.
But whichever stock you pick, make sure to weigh the pros and cons.
NIKE, Inc. (NYSE:NKE – Get Free Report) saw unusually large options trading activity on Thursday. Investors bought 181,646 call options on the stock. This is an increase of 27% compared to the average volume of 142,824 call options.
NIKE Price Performance NKE stock opened at $37.19 on Friday. The stock has a market cap of $55.23 billion, a price-to-earnings ratio of 17.88, a P/E/G ratio of 3.99 and a beta of 1.09. The company has a debt-to-equity ratio of 0.39, a current ratio of 2.07 and a quick ratio of 1.39. The company has a 50 day simple moving average of $37.57 and a 200 day simple moving average of $41.65. NIKE has a 1 year low of $31.97 and a 1 year high of $70.44.
NIKE (NYSE:NKE – Get Free Report) last issued its earnings results on Thursday, October 1st. The footwear maker reported $0.48 earnings per share for the quarter, beating analysts’ consensus estimates of $0.43 by $0.05. NIKE had a net margin of 6.74% and a return on equity of 15.94%. The firm had revenue of $11.21 billion for the quarter, compared to analyst estimates of $11.32 billion. During the same quarter last year, the business posted $0.49 earnings per share. The company’s quarterly revenue was down 4.3% on a year-over-year basis. NIKE has set its FY 2027 guidance at 1.150-1.350 EPS. Research analysts anticipate that NIKE will post 1.26 EPS for the current fiscal year.
NIKE Announces Dividend The business also recently declared a quarterly dividend, which was paid on Thursday, October 1st. Stockholders of record on Tuesday, September 1st were issued a dividend of $0.41 per share. The ex-dividend date was Tuesday, September 1st. This represents a $1.64 annualized dividend and a dividend yield of 4.4%. NIKE’s dividend payout ratio is 78.85%. Insider Buying and Selling at NIKE In other news, insider Amy Montagne sold 4,867 shares of NIKE stock in a transaction that occurred on Friday, August 7th. The shares were sold at an average price of $42.05, for a total value of $204,657.35. Following the completion of the sale, the insider directly owned 57,436 shares in the company, valued at approximately $2,415,183.80. The trade was a 7.81% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, EVP Philip McCartney sold 2,559 shares of the business’s stock in a transaction that occurred on Wednesday, September 9th. The shares were sold at an average price of $37.59, for a total value of $96,192.81. Following the completion of the sale, the executive vice president owned 78,121 shares of the company’s stock, valued at approximately $2,936,568.39. This trade represents a 3.17% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 14,974 shares of company stock valued at $600,126 over the last ninety days. Company insiders own 1.10% of the company’s stock.
Institutional Inflows and Outflows Large investors have recently modified their holdings of the company. OneDigital Investment Advisors LLC increased its stake in shares of NIKE by 32.8% in the 2nd quarter. OneDigital Investment Advisors LLC now owns 244,296 shares of the footwear maker’s stock valued at $10,028,000 after acquiring an additional 60,375 shares in the last quarter. Douglas Lane & Associates LLC boosted its stake in NIKE by 57.7% during the third quarter. Douglas Lane & Associates LLC now owns 1,521,611 shares of the footwear maker’s stock worth $53,865,000 after acquiring an additional 556,798 shares in the last quarter. B.A. Schrock Wealth Management Inc. bought a new position in NIKE during the third quarter worth $1,153,000. Quantitative Investment Management LLC bought a new position in NIKE during the second quarter worth $2,459,000. Finally, Deutsche Bank AG grew its holdings in NIKE by 8.0% in the second quarter. Deutsche Bank AG now owns 3,566,634 shares of the footwear maker’s stock worth $146,410,000 after purchasing an additional 264,576 shares during the period. 64.25% of the stock is currently owned by institutional investors.
NIKE News Roundup Here are the key news stories impacting NIKE this week:
Positive Sentiment: Investors seeking value boosted heavily sold consumer stocks, including Nike, as concerns about excessive AI spending prompted a shift away from technology shares. These Consumer Stocks Are Getting a Lift as Investors Rotate Out of Tech Positive Sentiment: Options activity was unusually strong, with traders purchasing approximately 181,646 NKE call options—about 27% above average volume—signaling increased bullish speculation, although it does not guarantee lasting gains. Neutral Sentiment: Recent commentary highlights Nike’s potential appeal as a turnaround and value investment after its steep decline, while noting that management still has to execute on its recovery strategy. Investigating one stock at a time before buying: Nike Negative Sentiment: Nike’s fundamental outlook remains challenging. Recent quarterly revenue declined 4.3% year over year to $11.21 billion, while Greater China sales reportedly fell 22%; management is also restructuring as sales weaken and costs rise. Nike Is Restructuring the Business Negative Sentiment: Investors face longer-term risks to income and valuation: Nike’s free cash flow may no longer fully cover its dividend, raising concerns ahead of the next dividend announcement after 24 consecutive years of increases. Nike Has Raised Its Dividend for 24 Straight Years Wall Street Analysts Forecast Growth NKE has been the subject of a number of analyst reports. Freedom Broker raised NIKE from a “hold” rating to a “buy” rating and dropped their price target for the company from $54.00 to $51.00 in a research note on Friday, October 2nd. Barclays set a $37.00 price objective on shares of NIKE and gave the stock an “overweight” rating in a research note on Monday, October 5th. Royal Bank Of Canada decreased their target price on shares of NIKE from $45.00 to $40.00 and set a “sector perform” rating on the stock in a report on Tuesday, September 29th. Deutsche Bank Aktiengesellschaft reissued a “hold” rating and issued a $33.00 target price on shares of NIKE in a report on Friday, October 9th. Finally, CICC Research dropped their target price on shares of NIKE from $58.00 to $44.80 and set a “neutral” rating for the company in a research report on Thursday, July 2nd. One analyst has rated the stock with a Strong Buy rating, seven have given a Buy rating, twenty-one have given a Hold rating and ten have given a Sell rating to the stock. According to MarketBeat, NIKE presently has a consensus rating of “Reduce” and an average target price of $41.07.
Check Out Our Latest Stock Report on NIKE
NIKE Company Profile (Get Free Report)
NIKE, Inc is a global sportswear company that designs, develops, markets and sells athletic footwear, apparel, equipment, accessories and related services. Its products are marketed under the NIKE, Jordan and Converse brands and are used across a broad range of sports and lifestyle activities, including running, basketball, football, training and outdoor pursuits.
The company distributes its products through a combination of wholesale partners, NIKE-owned retail stores and digital platforms.
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In late 2024, Nike (NKE +1.13%) brought on veteran executive Elliott Hill to replace John Donahoe as CEO and execute a new turnaround strategy. Two years later, investors are still waiting for the turnaround to show progress, and the stock price has been cut by more than 50%.
Wall Street analysts have lost hope that Nike will return to its former glory. Just 11 of the 43 analysts covering the company rate the stock a buy or overweight. The median price target for the stock is below its current price as of this writing.
Sometimes the best opportunities in the market appear just as it seems everyone has given up on a company. Is it time to be greedy while others are fearful for Nike's future?
Image source: The Motley Fool.
A new turnaround plan Hill developed the Win Now turnaround plan for Nike shortly after taking over as CEO in 2024. The focus was to improve marketing and product development while expanding distribution channels.
That focus has failed to pay off. While wholesale revenue has climbed in North America, offsetting weakness in direct sales last quarter, overall sales dropped 4% year over year last quarter. Management also forecast even bigger revenue declines through the rest of fiscal 2027. The struggle is especially profound in Greater China, where total sales dropped 26% year over year in the first quarter. China was previously a significant source of revenue growth.
To be sure, Nike's struggles in the region aren't entirely its fault. Macroeconomic headwinds have put pressure on Chinese consumers. That said, competing shoe companies On Holding and Decker Outdoor's Hoka both called out strong sales momentum in China last quarter.
NKE Nike$37.56+$0.42 (+1.13%)
NYSE · As of 11:33 AM ET 10/16/26
That speaks to the real challenge facing Nike. Its brand strength appears to be eroding as competing companies enter the market with better products and successful marketing campaigns. It's not just footwear, either. Nike faces stiff competition from many new apparel companies using direct-to-consumer channels and marketing to gain share.
Hill's turnaround plan appears to focus on the right challenges facing Nike -- reestablishing its brand through marketing and better products -- but it's taking a lot longer than anticipated. Now the company has introduced its Pace plan, which focuses on enabling faster operational changes. As a result, Nike expects to drive $2.5 billion in cost savings, but the majority of those savings won't be delivered for two or three years.
Can Nike overcome the challenges? The biggest question mark for investors considering picking up Nike shares at the lowest price it's traded since 2013 is whether its competitive advantage remains intact. A wonderful business can face setbacks, but as long as it maintains a wide moat, it can recover relatively quickly in the grand scheme of things.
The clearest sign of a competitive advantage is a relatively strong gross margin. Nike's gross margin expanded 60 basis points year over year last quarter, reaching 42.8%. That's well below the 45.4% gross margin it achieved a couple of years ago, but it also reflects an increase in wholesale revenue relative to direct sales.
A cause for concern, however, is that both On Holdings and Deckers Outdoor have increased their gross margins over the past decade, while Nike's has remained flat. What's more, they're producing much better gross margins. Likewise, Nike has seen a drop in its return on invested capital while its competitors have seen that metric improve, another sign of a weakening moat.
For now, it's best to wait and see about Nike stock. Investors should look for the Pace program and its cost-cutting efforts to produce better gross and operating margins while returning the company to sales growth. That will be the earliest indication that its brand strength and recent innovations are starting to resonate with customers, and that management can actually turn the business around and sustain growth for years to come.
Don't get greedy yet, but Nike could be a good stock to keep on your watch list.
Nike made a calculated bet that shoppers would follow the swoosh wherever it led, and for a while the margin math looked brilliant. What happened inside those emptied retail fixtures reshaped the entire competitive landscape in ways Nike is still…
Nike (NYSE:NKE | NKE Price Prediction) shares opened at $37.67 on Friday, a small gap up from the prior close. The stock is up 8.5% over the past week. No specific reason for that move has been reported. Over longer periods, shares are down 40.9% year to date, 43.7% over one year, and 76.2% over five years.
On the October 14, 2026, episode of The Investor’s Podcast (TIP853), co-host Kyle Grieve tied the decline to one choice: “Nike pulled its products from Foot Locker, and when they tried to reverse that decision, Foot Locker realized these other brands could sell just as well in that same prime real estate historically reserved only for Nike.” He also said Nike found that customers “were not as devoutly loyal to their products as they thought.”
Why Selling Direct Looked Like the Smarter Play Nike had real reasons to go direct. When it sells through its own stores, Nike.com, and its app, it keeps the margin a retailer would take, collects first-party customer data, and controls pricing and presentation. Grieve described the goal as owning the customer relationship and cutting out the wholesaler — the model Lululemon (NASDAQ:LULU) and Aritzia run.
The weak point was the assumption that shoppers would follow the swoosh wherever it went. As Nike cut back its wholesale orders, retailers filled the open wall space with rival brands, and those brands sold. Once a retailer has its own sell-through data on a competitor in a prime fixture, Nike must now negotiate for shelf space it once received by default.
Wholesale Is Back in the Numbers The channel mix has now turned. In fiscal Q2 2026, wholesale revenue rose 8% to $7.5 billion while Nike Direct fell 8% to $4.6 billion. In fiscal Q1 2027, reported on October 1, 2026, wholesale slipped 1% to $6.80 billion, Nike Direct fell 8% to $4.14 billion, and Nike Brand Digital dropped 13%. North America wholesale grew 9%.
The retail side has consolidated too. Dick’s Sporting Goods (NYSE:DKS) completed its acquisition of Foot Locker. On the October 1 call, Nike’s chief executive, Elliott Hill, described the company as “rebuilding our wholesale partnerships” and said, “performance product is selling” at accounts that include Dick’s and Foot Locker.
Total revenue came in at $11.21 billion, down 4.3% and below the $11.32 billion consensus. EPS of $0.48 beat the $0.44 estimate. Nike’s earnings release noted more work to do in Nike Sportswear, Jordan Brand, and Greater China, where revenue fell 22%.
A Moat Built Only on Brand Is Thinner Than Investors Assume Grieve’s co-host Shawn O’Malley was talking about Aritzia, but his point covers the whole category: “Brand is really Aritzia’s one competitive advantage. There are no switching costs, no network effects, no cost advantages. Retail is a place where things can go from great to bad very quickly, and there are very few instances of clothing brands being durable compounders.” He added, “Retail stocks can be like playing with fire. Things can worsen very quickly in retail. But on the flip side, when a brand is surging, returns can be explosive.”
Nike has scale and a large roster of athlete endorsements. A retailer deciding how to use a fixture, though, looks mostly at how fast the product sells. With no switching costs for shoppers, Nike’s spot on the shelf depends on how well its products sell.
What Has to Change Before Nike’s Next Report Management expects fiscal 2027 revenue to decline high single digits, with adjusted EPS of $1.15 to $1.35. That range excludes about $0.15 in costs from the Pace restructuring. The chief financial officer warned of revenue pressure “for the remainder of fiscal 27 and into 28.”
Rebuilding Nike’s shelf position would take three things:
Wholesale growth in North America that holds up without excess inventory, as Nike works with partners to clear excess inventory Signs that Sportswear and Jordan are stabilizing, since they were a “high single-digit drag” on results Gross margin holding near 42.8% as Nike cuts supply to improve full-price sales The next test is Nike’s fiscal Q2 2027 report. It is expected on December 16, 2026, after the close, but the company has not confirmed the date. Watch whether wholesale gains in that report come with healthy sell-through. That would show whether Nike is winning back prime shelf space or just shipping more product into it.
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Nike's (NKE) Jordan brand is gaining ground among sneaker resellers, offering an “encouraging” signal for a business still struggling to regain its footing. Citi's tracking showed Nike captured 72.3% of resale volume in September, a 63bps increase from August, with Jordan driving most of the improvement.
The retailer, which has been struggling to revive its business and regain momentum under CEO Elliott Hill, is hoping the world's most populous country can help it turn the page on its performance.
As it reported its fiscal first-quarter earnings on Oct. 1, the company announced it will create a new global campus in Bengaluru, India, as part of its growth strategy. Hill wrote in a letter to employees that the new facility would be a "long-term investment" to help position Nike for success.
"India is already an important growth market and manufacturing hub for Nike, with strong capabilities and access to talent," Hill wrote.
The new campus is expected to open in the next few years and span corporate roles across the organization, including the namesake Nike brand, Jordan Brand and Converse. Nike plans to discuss its India campus in detail at its investor day next month.
In a statement to CNBC, a Nike spokesperson said expanding into India is a "natural" next step for the company as it looks to grow its global presence.
"As participation in running, basketball, football, fitness and other sports continues to grow across India, we see an opportunity to better serve athletes through stronger local capabilities, consumer insights, and innovation," the spokesperson said.
India will be the world's third-largest retail market by 2030, according to Indian conglomerate Reliance Industries. Its e-commerce market was valued at $159.25 billion in 2026 and is projected to reach $332.94 billion by 2031, according to IBEF, a business advocacy organization created by the Indian government.
Nike has endured a yearslong slump and is trying to right its business under Hill's turnaround plan. Nike also announced this month that it would lay off workers across the company as part of what it has dubbed its Pace strategy, which includes supply chain changes and reorganization of the company's geographic segments. Nike expects the effort to deliver approximately $2.5 billion in savings through fiscal 2031.
Nike's decision to invest further in India as part of its comeback comes as the sportswear company sheds revenue in another critical international market: China. Though its fiscal first-quarter North America revenue came in just above Wall Street expectations, Hill said that performance wasn't enough to offset pressures abroad.
Nike has been particularly struggling in the Greater China market, where its revenue dropped by 26% in its fiscal first quarter. It's part of what experts have said is a broader trend of American companies losing relevance and traction to domestic brands as the once-lucrative market matures.
On a call with analysts earlier this month, Hill said the company was taking "deliberate actions" to strengthen its China business, though he said those effects will take time to materialize. Hill said the company plans to refresh its physical retail, spearhead a digital cleanup and create higher quality experiences for consumers.
The Nike spokesperson told CNBC the company is "deeply committed" to China and sees the region as one of its "most important long-term growth markets," even as Nike expands its presence in India.
"China remains a long-term priority for Nike, while India represents another important opportunity to invest in the future of sport and the next generation of athletes," the spokesperson said.
Investing in a long-term visionThe company's expansion in India may be coming at both an opportune and inopportune time, according to experts. Investing in a growing international market does not guarantee higher sales — it also requires persuading Indian consumers they want the Nike brand, a challenge the company has struggled to overcome in China.
"What Nike, I think, is doing right now is going region by region and working to reestablish what the brand stands for," Simeon Siegel, a senior managing director at Guggenheim Securities, told CNBC.
Siegel said part of the dissonance for Nike is that each region and segment of the business is at a different stage of its turnaround. He said investing in India may set the company up for a more sustainable future if the China business continues to lag, but Nike needs to have a compelling product, solid storytelling and extensive distribution in the region to be successful there.
"I think the company needs to look inward and figure out what is the right way to reestablish profitability," he said. "And that involves, in certain instances, shrinking and saving and cutting, and, in certain instances, investing and looking toward the future, because the goal here is not to shrink to oblivion; it's to shrink to stability, and then ultimately growth."
The global strategy may also focus too much on a long-term vision rather than more immediate fixes, according to Jessica Ramirez, co-founder and managing director at advisory firm The Consumer Collective, who specializes in retail and apparel. Ramirez said she already thought Nike and Hill's vision were "out of touch" and the plan for the India campus didn't necessarily help its case.
"I don't know that this plan of India is an immediate solution to their problems right now," she said. "They have to plan long term, right? But they also need to plan short term, which is continuously falling apart."
She said Nike has not shared plans that are concrete enough to win back momentum in China and has to develop both regions hand in hand.
While Nike under Hill has improved its wholesale and performance categories, Ramirez said it has yet to master its direct-to-consumer and sportswear segments, which would allow the company to flourish in all of its markets.
The Nike spokesperson told CNBC the retailer is committed to investing in both countries as it tries to expand its global presence.
"Importantly, this is not an either/or decision between India and China," the spokesperson said. "We always invest market by market based on long-term opportunities to serve athletes and grow sport around the world."
A growing market opportunityStill, India presents an attractive opportunity for many companies looking to unlock growth abroad.
Ramirez said Nike is just the latest to join a cohort of American companies looking to establish their presence in the market. While many brands began investing in China years ago, she said that trend is now pointing toward India instead, as U.S. companies see more spending pressures in the Chinese market and navigate geopolitical tensions between the two countries.
"It's to get in there for the long term and to make sure that they are there for when they can reap the positive effects," she said. "I want to say this conversation started getting a bit more engaging in the last two to three years, when companies started investing more in India."
India is one of the world's strongest market performers, driven primarily by domestic demand, investment and supply-chain diversification, according to an analysis from Accenture. With a population of over 1 billion, the country presents a growth opportunity similar to the one China offered in the early 2000s.
"It's going to be a fast-growing consumer base where we assume their income levels will continue to go up and they'll have much more purchasing power, and so maybe could we be tapping in on that market from a consumer lens," Chris Tomsovic, who leads Accenture's macro foresight team, told CNBC.
Still, one of the biggest focus points for the Indian consumer is price sensitivity, which will pose a challenge for American companies trying to break into the market, he added. Even so, many domestic brands on the market are younger, meaning there could be more opportunities right now for Western companies to take market share.
Another challenge is that the Chinese consumer has historically been receptive to American brands, whereas it will still take more data to understand how Indian shoppers feel about those businesses, he said. For sportswear retailers, the focus of the sports most popular in each region will also factor into that equation.
"Can they really localize the product, make the price point work? Can they adapt to the local social media technology ecosystem? Can they adapt to the local cultural values and norms that the consumer wants?" Tomsovic said.
"If you're able to nail that, then I think you're right. Whether you're a footwear brand, whether you're an athleisure brand, I think there's a huge opportunity there with a billion consumers," he said.
This is CNBC's Morning Squawk newsletter. Subscribe here to receive future editions in your inbox.
Happy Friday. I'm running the Detroit Marathon on Sunday, so I'm especially grateful to see that, unlike recent weekends, there's no inclement weather in the forecast.
Some programming news: I'm moving to a new reporting assignment at CNBC, which means this is my last edition as the writer of Morning Squawk. It's been a pleasure getting to recap the biggest stories with you over the last 16 months. There's certainly been no shortage of news.
Rest assured, Morning Squawk will continue to arrive in your inbox as expected every weekday. I'll leave you with a cliffhanger: To find out who takes the helm, you'll have to open their first edition on Monday.
Stock futures are little changed this morning. Wall Street had a positive day yesterday.
Here are five key things investors need to know to start the trading day:
1. Market intelligence2. Speed limitNearly a decade after the company began collecting deposits for the electric sports car, Tesla last night finally revealed its next-generation Roadster. A prototype of the two-seater vehicle showcased its capabilities at a livestreamed event in Texas: It clung to a ramp upside down, flipped in mid-air and hovered above the ground.
While it certainly generated a lot of buzz among Elon Musk fans, the Roadster is expected to be a high-end, low-volume model. Musk said the car would enter production in 2028 and didn't give a price tag. He also said the Roadster, which doesn't have Tesla's automated driving system, would be the company's last vehicle intended to be controlled by a human driver.
As CNBC's Lora Kolodny notes, the new version faced years of delays after first being announced in 2017. Reservations for the improved Roadster reopened in recent weeks, allowing potential buyers from the U.S., China and Canada to put down $50,000.
3. Forecasting heatAnother day, another hot inflation report. The producer price index released Thursday recorded its highest monthly and annual increases since 2022. As expected, energy costs drove the index higher amid the Iran war, and there are signs that energy-related costs are spilling over into other categories.
As CNBC's Steve Liesman writes, the data signals the Federal Reserve has more work to do to combat inflation. Economists now expect the core personal consumption expenditures price index — the Fed's favored inflation gauge — to rise when it's released later this month.
Fed Chairman Kevin Warsh avoided giving any signal as to whether the central bank will hike rates again before the end of the year, saying in a speech in Bangkok late last night that he doesn't "prejudge meetings." Traders took his comments as a sign that the Fed is likely to hold rates steady at its next meeting later this month.
4. Muse, meet MacApple and Meta are teaming up. The tech giants announced yesterday that developers will be able to run Meta's new open-weight AI model, Muse Spark, locally on Apple's pricier Mac models.
The collaboration between the two companies, which have in the past avoided public partnerships, is a sign that the AI boom has caused somewhat of a sea change in Silicon Valley alliances.
Meta CEO Mark Zuckerberg and Apple CEO John Ternus both promoted the collaboration on social media. Representatives from both companies declined to say if it could be the start of a broader relationship.
5. TravelingAs Nike tries to turn around its business, it's looking to India for a boost.
The athletic retailer announced this month that it's creating a new global campus in the city of Bengaluru that's expected to open in the next few years. CEO Elliott Hill told employees that the new facility represents a "long-term investment" in what he called "an important growth market and manufacturing hub for Nike." The retailer plans to discuss the India campus further at its investor day next month.
As CNBC's Laya Neelakandan notes, the push further into India comes as Nike struggles in China, another major international market. As a whole, the company is in the midst of a quarters-long slump in business.
Nike (NKE +5.21%) is informing investors that it believes it has the right strategy in place.
*Stock prices used were the afternoon prices of Oct. 13, 2026. The video was published on Oct. 15, 2026.
Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
On October 15, 2026, Nike Inc (NKE) shares rose by 5.2%, closing at $37.14. Despite today's positive movement, the stock has experienced significant declines ov
Nike has handed income investors 24 straight years of dividend growth, but a shrinking business, free cash flow that no longer covers the payout, and a five-year turnaround plan leave this November's announcement hanging by a thread.
The dividend from Nike (NYSE:NKE | NKE Price Prediction) now yields about 4.48%. That figure is high because the stock has fallen 41.02% this year to $36.60. Retirees who hold Nike for income want to know one thing: will a run that reached its 24th consecutive year of increasing dividend payouts keep going while the business is still shrinking?
Nike usually announces its raise in November. It declared the first $0.41 payment on November 20, 2025 and the first $0.40 payment on November 14, 2024. This year’s decision lands close to a November investor day, where management plans to lay out a financial algorithm covering the following five years.
Raises Are Getting Smaller Every Year Ex-Dividend Window Quarterly Dividend Raise Dec 2022 to Sep 2023 $0.34 n/a Dec 2023 to Sep 2024 $0.37 8.8% Dec 2024 to Sep 2025 $0.40 8.1% Dec 2025 to Sep 2026 $0.41 2.5% The last raise added one cent a quarter. That sharp slowdown matters more for income investors than anything else on this list.
Free Cash Flow Fell Short of the Dividend In fiscal 2026, Nike generated $2.868 billion in operating cash flow and spent $684 million on capital expenditures. That left $2.184 billion in free cash flow against $2.407 billion in dividends, a gap of $223 million. Coverage got worse in the first quarter of fiscal 2027, when free cash flow was negative $64 million and dividends cost $610 million.
Against earnings, the annual dividend is $1.64, and adjusted EPS guidance is $1.15 to $1.35. That places the payout at 131.2% of earnings at the center of guidance, the kind of thin coverage that lands on every checklist of warning signs we flagged in our free dividend trap guide.
Buybacks Have Already Been Cut Share repurchases dropped from $4.25 billion in fiscal 2024 to $146 million in fiscal 2026, even though Nike has an $18 billion plan. Nike is cutting buybacks to protect the dividend. CFO Dave Denton said on the October 1 call:
“Dividend is a very significant priority for us here at Nike. Under all scenarios, we have support for maintaining and ultimately growing the dividend over time.”
Nike can fund the shortfall from its $8.4 billion in cash and short-term investments, and it holds more cash than debt.
Sales Are Still Falling Before the Pace Savings Arrive First-quarter revenue fell 4.3% to $11.21 billion, and Greater China dropped 22%. Gross margin improved 60 bps to 42.8%, but management expects discounts used to clear excess wholesale inventory to pressure margins. Nike expects fiscal 2027 revenue to fall by a high-single-digit percentage and operating profit (EBIT) to fall even more. Pace, Nike’s cost-cutting and restructuring program, targets $2.5 billion in savings, with most of them arriving in fiscal years 2029 and 2030. CEO Elliott Hill said:
“We have more work to do in NIKE Sportswear, Jordan Brand and Greater China, and we’re taking deliberate actions to strengthen those businesses the right way for the long term.”
How Two Rivals Handle Cash Lululemon Athletica (NASDAQ:LULU) pays no dividend and returns cash through buybacks, including $330.0 million in its second quarter. VF Corp (NYSE:VFC) pays just $0.09 a quarter while it works to reduce debt, on free cash flow of $405M in fiscal 2026. Nike has made a larger dividend promise than either company, so it has more to lose if it breaks the run.
Verdict: The Streak Should Survive, but Growth Will Stall Yes, Nike will most likely keep raising its dividend, because its cash pile can cover the gap and management has tied its credibility to the run. However, investors should expect raises to stay about as small as the last one-penny increase through fiscal 2028. Real dividend growth will have to wait until the Pace savings come. Keep an eye on the November investor day for the five-year targets.
Contact [email protected] for any questions or corrections.
Shares of Nike (NYSE: NKE) were moving higher today even as there was no company-specific news out of the stock.
Instead, the beaten-down footwear company was gaining as part of a broader market rotation from high-priced tech stocks to value stocks in areas like the consumer discretionary sector.
As of 12:38 p.m. ET, the stock was up 5.3%. Additionally, peers like Lululemon and Deckers were up 5.1% and 3.9%, respectively. Meanwhile, the Nasdaq Composite was down 0.5%, while the State Street Consumer Discretionary ETF was up 1.3%.
Image source: Nike.
Why the rotation is happening nowThere is no simple reason for the investor movement today, but Wall Street tends to have a herd mentality, and when one sentiment catches on, it sometimes spreads.
Tech stocks have been pulling back this week on fears of rising interest rates, circular financing problems, competition from China, and other threats, and investors have been collecting profit and are looking for new places to deploy that cash.
Nike and its peers are one attractive choice, as those three stocks are all down sharply from their peaks. Nike's decline isn't undeserved, as the stock has reported flat or declining revenue growth over the last three years.
Buying the stock at this point requires faith that Nike will eventually get its turnaround right, but if it does, the upside could be considerable. To sweeten the deal, the stock currently pays a dividend yield of 4.6%.
NKE Nike$37.43+$2.13 (+6.02%)
NYSE · As of 1:26 PM ET 10/15/26
What's next for NikeNike is coming off another disappointing earnings report at the beginning of the month, so investors should temper their expectations for a quick turnaround. However, it's still the biggest brand in sports, and it seems like a mistake to bet on its continued decline. The company has seen green shoots in some areas, like running, and CEO Elliott Hill, who took over two years ago, deserves some more time to get the company back on track.
Investors shouldn't overreact to today's bounce, but it's good news that investors finally seem to see the stock as a value play.
Jeremy Bowman has positions in Lululemon Athletica Inc. and Nike. The Motley Fool has positions in and recommends Deckers Outdoor and Nike. The Motley Fool recommends Lululemon Athletica Inc. The Motley Fool has a disclosure policy.
BIRMINGHAM, Ala.--(BUSINESS WIRE)-- #BallininBoutwell--Birmingham-based Hibbett and Nike awarded $50,000 to Woodlawn High School's boys and girls basketball programs through First String, their philanthropic program supporting high school student-athletes on and off the court. The surprise investment was announced October 13 at Birmingham's historic Boutwell Auditorium as Hibbett and Nike marked the third year of First String and extended the community impact of Ballin' in Boutwell. Birmingham Mayor Randall Woodfi.
Money is rotating out of AI darlings and into consumer brands that spent the past year getting beaten down, and Nike is leading that charge. Whether the buying pressure signals a real turnaround or just a temporary bounce hinges on…
The hardest-hit names in consumer discretionary are drawing fresh buyers as money shifts away from the market’s favorite trades. Nike (NYSE:NKE | NKE Price Prediction) stock is at $36.89, up 5% in morning trading, leading a rebound in battered footwear and apparel names.
Meanwhile, Lululemon Athletica (NASDAQ:LULU) stock is at $98.24, up 4%, tracking Nike’s gain. On Holding (NYSE:ONON) stock is at $35.30, down 0.6%, missing the rebound.
For sector context, the Consumer Discretionary Select Sector SPDR ETF (NYSEARCA:XLY) is at $112.68, up 1%. However, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is at $769.71, practically unchanged, so the consumer-products sector rally is running against a softer broad market.
Money Rotates From AI Into Consumer Brands Investors are shifting funds out of artificial intelligence and technology names into consumer and defensive sectors, and Nike stock leads the battered brands catching that bid. Shares of Nike entered October on pace for their worst year on record, leaving room for a rebound.
Riding a mania while planning the exit is the whole exercise in our free bubble survivor’s handbook, which pairs well with the rotation story playing out now.
In its Q1 FY2027 report on October 1, Nike posted GAAP diluted EPS of $0.48, ahead of the $0.44 consensus. The company’s revenue slipped to $11.21 billion, missing expectations. That mix of an earnings beat and a revenue miss repeated the pattern from the prior quarter.
Greater China dragged on Nike’s results, with revenue there falling 22%, while Converse dropped 28%. Profitability held up better, as Nike’s gross margin expanded 60 basis points to 42.8%.
North America offered a bright spot for Nike, with revenue rising 2% to $5.13 billion as running, global football and basketball grew. Its digital channel stayed soft, with Nike Brand Digital down 13%.
Wall Street Splits on Nike Bank of America analyst Lorraine Hutchinson downgraded Nike shares to Underperform from Neutral on September 25, then cut the firm’s price target again after the October 1 report. Hutchinson pointed to fading momentum in the lifestyle category and weakness in Greater China. Oppenheimer kept an Outperform rating on Nike shares while cutting its own price target.
That split frames the value-versus-value-trap debate. Nike stock trades at a trailing twelve-month P/E ratio of 18x, a multiple that looks cheap only if earnings recover. Management has guided fiscal 2027 revenue to decline high-single digits, with adjusted diluted EPS of $1.15 to $1.35.
Pace, Nike’s new restructuring program, targets $2.5 billion in cumulative savings through fiscal 2031 against $1 billion in pre-tax charges. The plan reorganizes Nike from four geographies to three, though most savings land in fiscal 2029 and 2030. CEO Elliott Hill said, “The Sport Offense is driving measurable progress across our performance business.”
Lululemon Joins the Rally as On Holding Slips Lululemon shares fit the same profile. The company is working through a turnaround, with incoming CEO Heidi O’Neill set to take the helm. Management’s recovery plan centers on fresh product and brand investment, the tools it highlighted for winning back traffic.
On Holding stock sits on the other side of that divide. Known for its CloudTec cushioning technology, the Swiss premium footwear brand has been the growth outperformer in the space, and the slight dip in On Holding stock contrasts with the gain in Nike stock. That gap shows the rally concentrating in the names that have fallen furthest.
Sales Decide the Next Chapter for Nike The next test for Nike is whether sales stabilize. During the October 1 earnings call, Hill stated, “At our size and scale, meaningful change takes time. Our turnaround is happening.” CFO Dave Denton added that Nike’s guidance assumes China “actually gets worse from a revenue perspective for the balance of this year.”
Nike’s investor day in November could show whether management’s broader financial targets hold up. Shares of Nike could keep drawing rotation buyers, yet the bearish call from Bank of America remains a counterweight until revenue turns.
Denton also called the Nike dividend “a very significant priority,” which offers holders some support during the reset. When all is said and done, NKE stock investors should keep their exposure moderate for now.
Contact [email protected] for any questions or corrections.
*Stock prices used were the afternoon prices of Oct. 12, 2026. The video was published on Oct. 14, 2026.
Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
Investors interested in stocks from the Shoes and Retail Apparel sector have probably already heard of Carter's (CRI - Free Report) and Nike (NKE - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Carter's has a Zacks Rank of #2 (Buy), while Nike has a Zacks Rank of #5 (Strong Sell) right now. This means that CRI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
CRI currently has a forward P/E ratio of 9.72, while NKE has a forward P/E of 26.64. We also note that CRI has a PEG ratio of 3.59. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NKE currently has a PEG ratio of 3.79.
Another notable valuation metric for CRI is its P/B ratio of 1.14. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, NKE has a P/B of 3.45.
These are just a few of the metrics contributing to CRI's Value grade of A and NKE's Value grade of D.
CRI stands above NKE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CRI is the superior value option right now.
I think the primary reason everyone is talking about Nike (NKE -0.06%) stock is its sales decline.
*Stock prices used were the afternoon prices of Oct. 11, 2026. The video was published on Oct. 13, 2026.
Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
According to Interbrand, Nike (NKE -0.06%) is the world's 23rd-most-valuable brand. That kind of global recognition, built over decades, hasn't helped investors at all. The leading sportswear enterprise has faltered. And management has been in the middle of a turnaround that's taking longer than anticipated.
This consumer discretionary stock is down an alarming 80% from its peak (as of Oct. 12), set almost five years ago in November 2021. For investors, here's the only number that matters to the Nike story right now.
Image source: The Motley Fool.
Watch the top line
Investors don't have to look hard to find the prevailing metric that makes or breaks the turnaround. It all comes down to Nike's revenue.
In the latest fiscal quarter (Q1 2027 ended Aug. 31), the top line fell 4% year over year to $11.2 billion. This figure missed Wall Street analyst estimates. On a trailing 12-month basis, sales steadily declined over the past two and a half years.
Revenue is a clear signal of the company's demand trajectory. And it hasn't been encouraging. In North America, which is Nike's largest territory, sales climbed 2% in the first quarter.
Greater China has been wildly disappointing. Revenue there dipped 22% in the last fiscal quarter. "We continue to execute a marketplace reset in China," CEO Elliott Hill said on the earnings call.
Looking at the product picture, it's a mixed bag. On the one hand, performance sales were up high single digits. Running was up double digits. But sportswear revenue, defined by footwear such as the Air Force 1, Nike Dunk, and Air Max series, fell by low double digits. And the Jordan brand dropped by a mid-teens percentage.
Nike is desperately trying to drum up customer excitement. However, it will be a difficult road ahead. The leadership team expects revenue to decline by high single digits in fiscal 2027. Unless Nike returns to healthy and consistent sales growth, the rest of the income statement will feel the pain, particularly around profitability. From a historical perspective, margins will remain under pressure.
Management will hold an investor day next month. The business will reveal fresh long-term financial guidance that could add to the bearish sentiment if the outlook misses the mark.
Premium Feature
Moneyball Superscore
54/100
Today's Change
(
-0.06
%) $
-0.02
Current Price
$
35.33
A risky opportunity
At $35.11 per share, Nike's stock is at a 13-year low. It seems that sentiment could not be any worse. Contrarian investors might find this to be a compelling opportunity. After all, if Nike reports upbeat financial results, its shares could perform well.
I view the company as a risky bet, though. It's extremely difficult to invest in turnaround situations. There is so much uncertainty not only around actual progress being made, but also the timing of these possible improvements. I think investors are better off being overly cautious with Nike right now.
Odklon od nošení tenisek se projevuje už i na akciových trzích. Akcie jejich výrobců, jako je Nike nebo Adidas, oslabují. Lépe se prodávají a více se daří producentům formálnějších druhů obuvi typu mokasín, nyní často označovaných jako loafersy, informuje agentura Bloomberg.
Akciový trh konečně odráží to, co milovníci módy tvrdí už celé měsíce: nosit tenisky do kanceláře už není "in", píše agentura. Na přechodu lidí od ležérních tepláků k elegantnějšímu oblečení nejvíce tratí výrobci sportovního oblečení. Do popředí se naopak vracejí značky, které během překotného trendu "athleisure" (kombinace sportovního a volnočasového oblečení) ustoupily do pozadí.
Poptávka po teniskách ještě před nedávnem prudce rostla. Už před pandemií covidu-19 mnoho lidí přecházelo od klasické obuvi k pohodlnějším variantám. To podle výzkumné společnosti GlobalData vedlo k tomu, že podíl sportovní obuvi na globálním trhu vzrostl z přibližně 37 procent v roce 2012 na více než 50 procent v roce 2024.
Zájem o obuv a oblečení určené přímo ke sportování je tu stále. Mimo sportoviště a posilovny však mnoho zákazníků znovu objevuje elegantnější obuv. Podle společnosti EDITED, která se zabývá průzkumem trhu, jsou mokasíny na nejlepší cestě nahradit tenisky a stát se pro muže i ženy tou pravou pohodlnou obuví pro podzimní sezónu. Naopak obzvláště špatně se prodávají mohutné tenisky.
Akcie výrobce obuvi Steve Madden si za posledních 12 měsíců připsaly 28 procent, akcie společnosti Ralph Lauren za stejnou dobu posílily o téměř 18 procent. Naopak akcie společnosti Nike za poslední rok odepsaly zhruba 48 procent a akcie Adidasu 17 procent.
Poptávka po obměně šatníku se mezitím rychle rozšiřuje i mimo oblast obuvi. Ve Spojených státech, kde spotřebitelé čelí tlaku kvůli zvyšující se inflaci, se oblečení prodává stále překvapivě dobře, všímá si Bloomberg a poznamenává, že oživení se týká i spodního prádla. V době, kdy byl velkým hitem styl athleisure, přešlo mnoho žen na sportovní podprsenky. Elegantnější oblečení si však žádá spodní prádlo, které lépe tvaruje postavu, a přitom zůstává pohodlné. Právě to může přispívat k výraznému růstu společnosti Victoria’s Secret, uvádí agentura. Akcie této americké firmy mají za posledních 12 měsíců k dobru přes 200 procent.
Nike (NKE -0.06%) stock keeps making new 52-week lows.
*Stock prices used were the afternoon prices of Oct. 9, 2026. The video was published on Oct. 11, 2026.
Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
NKE's digital transformation aims to boost consumer engagement and direct sales, but weakening online demand and rising costs pose profitability challenges.
Nike (NKE -0.09%) shares have fallen 1.9% so far this month (as of Oct. 7). This drop has compounded a wildly disappointing run for the global sportswear business. The consumer discretionary stock is down 46% in 2026 and is trading 80% off its peak from November 2021.
Here's what history says October will bring for Nike investors.
Image source: The Motley Fool.
October has been a mixed bag for Nike The stock posted negative returns in October 2024 and October 2025. However, it registered positive gains in each October of the three prior years. Clearly, the results have been a mixed bag, largely influenced by changing macroeconomic and industry conditions.
There is no clear takeaway from this track record. It's challenging for investors to make any definitive conclusions about how the rest of this month will unfold.
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The prevailing sentiment can be characterized by extreme bearishness, though. Nike recently reported financial results for the fiscal 2027 first quarter (ended Aug. 31), revealing a 4% year-over-year revenue decline driven by a 26% dip in China sales. Layoffs were also announced. Elliott Hill has been CEO for two years now, with little progress to show during his tenure.
Nike continues to struggle mightily to return to profitable growth. And the market is worried the business will never return to its past glory. Shares trade near a 13-year low.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy.
Nike (NKE - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this athletic apparel maker have returned -5.1%, compared to the Zacks S&P 500 composite's +1.3% change. During this period, the Zacks Shoes and Retail Apparel industry, which Nike falls in, has lost 6.9%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Nike is expected to post earnings of $0.40 per share for the current quarter, representing a year-over-year change of -24.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -24.3%.
The consensus earnings estimate of $1.34 for the current fiscal year indicates a year-over-year change of -15.2%. This estimate has changed -25.6% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $1.78 indicates a change of +32.8% from what Nike is expected to report a year ago. Over the past month, the estimate has changed -23.9%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Nike is rated Zacks Rank #5 (Strong Sell).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Nike, the consensus sales estimate for the current quarter of $11.5 billion indicates a year-over-year change of -7.5%. For the current and next fiscal years, $42.72 billion and $44.89 billion estimates indicate -7.9% and +5.1% changes, respectively.
Last Reported Results and Surprise HistoryNike reported revenues of $11.21 billion in the last reported quarter, representing a year-over-year change of -4.3%. EPS of $0.48 for the same period compares with $0.49 a year ago.
Compared to the Zacks Consensus Estimate of $11.4 billion, the reported revenues represent a surprise of -1.65%. The EPS surprise was +11.63%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates three times over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Nike is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Nike. However, its Zacks Rank #5 does suggest that it may underperform the broader market in the near term.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Nike (NKE +1.11%) is like a retired professional athlete hoping to stage a comeback, but struggling to find a way to keep pace with the next generation of stars. Down roughly 80% from the all-time high it touched in late 2021, the stock is at its lowest level in more than a decade.
Some may say it's a bargain, but there's one reason I'm still avoiding the stock: China.
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Nike's sales in the Greater China region fell by 26% on a constant-currency basis in the first quarter of its fiscal 2027, accelerating its decline in that region. The sneaker and athletic apparel giant doesn't seem to have a clear answer for how to win back customers in China, as consumers there have moved beyond the "Swoosh," and now tend to favor Chinese-born brands.
While Nike's sliding China sales stand out, the overall company is shrinking as well. Revenue fell 4% to just over $11.2 billion, which was more than $107 million below analysts' consensus expectations. Converse and Nike Brand Digital sales fell 28% and 13%, respectively.
Image source: The Motley Fool.
CEO Elliott Hill announced there would be layoffs in 2027 as Nike undergoes a restructuring, but the company hasn't released specifics of the plan yet.
There was some good news in the fiscal Q1 report: Gross margin expanded, sales in the North America region grew by 2% on a constant-currency basis, and earnings per share beat expectations. Those upbeat notes, unfortunately, weren't enough to overcome the slew of unpleasant metrics, nor the expectation that the company will cut its revenue guidance for the fiscal year.
I'm not convinced this global apparel brand will achieve its turnaround anytime soon. It needs to find a strategy to stabilize sales in China and begin to lure customers back, but consumers have plenty of choices and little brand loyalty. Additionally, Nike hasn't produced any newsworthy or innovative products in quite some time. What it needs is a total brand refresh, and until it gets one, Nike stock is still too expensive for investors to buy.
Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy.
Key Takeaways NIKE shares fell 2.2% after Q1 fiscal 2027 results, as revenues dropped 4% despite an earnings beat.Greater China sales plunged 22%, while weakness in Sportswear and Jordan Brand weighed on NIKE's turnaround.NIKE expects fiscal 2027 revenues to fall at a high-single-digit rate despite $2.5B in planned Pace savings. NIKE, Inc. (NKE - Free Report) shares came under pressure following its first-quarter fiscal 2027 earnings report, as investors focused on weak sales trends and a cautious outlook despite an earnings beat. The company reported quarterly earnings of 48 cents per share, surpassing the Zacks Consensus Estimate of 43 cents. However, revenues of $11.2 billion declined 4% year over year and fell short of expectations, raising concerns about the pace of NIKE’s ongoing turnaround.
The results highlight the uneven nature of NIKE’s ongoing turnaround. Performance-oriented categories continued to gain traction, but weakness in Sportswear, Jordan Brand and Greater China offset some of the progress. NIKE is also taking deliberate actions to reduce supply across weaker portions of its portfolio, which is expected to pressure sales in the near term while supporting healthier inventory and full-price selling over time.
Greater China remained a key drag on performance, with revenues declining sharply. The region continues to face intense competition, softer consumer demand and challenges related to product momentum. Weakness in the Sportswear and Jordan brands also remains a concern, although the company is working to improve product assortments and strengthen its connection with consumers.
We note that NKE's shares have fallen 2.2% since it released its first-quarter fiscal 2027 results on Oct. 1, 2026, after market close. Shares of the company have lost 20.2% in the past six months compared with the industry's decline of 17.3%.
Image Source: Zacks Investment Research
NKE's Q1 Key Financial MetricsNIKE's geographic trends stayed mixed in the reported quarter. NIKE’s North America revenues increased 2% year over year to $5.1 billion in the first quarter of fiscal 2027. The region benefited from performance products, with management highlighting Running, Global Football and Basketball as key contributors. The segment's sales met the Zacks Consensus Estimate.
EMEA revenues fell 5% to $3.18 billion, primarily because of a sharp 11% decline in footwear revenues. Apparel and equipment growth partly offset the footwear weakness. The segment's sales outpaced the Zacks Consensus Estimate of $3.14 billion.
Greater China revenues declined 22% on a reported basis to $1.2 billion and 26% on a currency-neutral basis. The segment's sales lagged the Zacks Consensus Estimate of $1.3 billion.
Asia Pacific & Latin America revenues dipped 2% to $1.5 billion but were flat excluding currency changes. The segment's sales almost met the Zacks Consensus Estimate.
What Does NIKE Fiscal 2027 View Say?Persistent weakness in Greater China and sluggish demand across key lifestyle categories could limit near-term growth. EMEA promotional activity and a tougher North America sell-in comparison are expected to pressure second-quarter revenues by roughly 400 basis points. While these factors may weigh on near-term sales, the company is prioritizing higher-quality revenues, reduced promotional dependence and a more sustainable growth trajectory.
NIKE introduced Pace, an operating-model transformation designed to scale its Sport Offense, modernize the supply chain and streamline the organization. As part of Pace, it intends to organize its operations across three geographies. Pace is expected to generate about $2.5 billion in cumulative savings through fiscal 2031.
However, NIKE expects fiscal 2027 revenues to decline at a high-single-digit rate, highlighting the difficult operating environment. Management expects supply-reduction actions in Sportswear, Jordan Brand and Greater China to weigh on revenues through the remainder of the current fiscal year and into fiscal 2028.
Adjusted earnings per share are projected to be in the band of $1.15-$1.35, excluding about 15 cents of Pace-related restructuring impact in fiscal 2027. The company recorded earnings per share of $1.58 in the last fiscal year. EBIT is expected to decrease by a higher percentage than revenues due to gross-margin pressure, fixed-cost deleverage and higher input costs, while selling, general & administrative expense is projected to be down year over year.
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Analysts have also become pessimistic about the stock, as NIKE has seen downward earnings estimate revisions over the past seven days. The Zacks Consensus Estimate has declined 16.8% to $1.34 per share for fiscal 2027 and 16% to $1.78 for fiscal 2028 in the said time period. The consensus estimate for NIKE’s fiscal 2027 earnings per share and revenues indicate a year-over-year decrease of 15.2% and 7.9%, respectively. The weakening earnings outlook, coupled with expectations for continued sales pressure, could keep investors on the sidelines. Hence, NIKE’s Zacks Rank #5 (Strong Sell) reflects the cautious outlook for the stock.
Key Picks in the Consumer Discretionary Space Duluth Holdings Inc. (DLTH - Free Report) , which deals in casual wear, workwear and accessories for men and women, currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Duluth Holdings delivered a trailing four-quarter earnings surprise of 122.5%, on average. The Zacks Consensus Estimate for DLTH’s current financial-year EPS indicates a rise of 18.6% from the year-ago reported number.
Columbia Sportswear (COLM - Free Report) , which engages in marketing and distribution of outdoor and active lifestyle apparel, footwear and accessories, currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for COLM’s current financial-year sales is expected to rise 1.9% from the year-ago reported figure. COLM delivered a trailing four-quarter earnings surprise of 36%, on average.
Gildan Activewear Inc. (GIL - Free Report) , which is a manufacturer and marketer of premium quality branded basic activewear, currently carries a Zacks Rank of 2.
GIL delivered a trailing four-quarter earnings surprise of 2.5%, on average. The Zacks Consensus Estimate for Gildan Activewear’s current financial-year sales indicates growth of 66.3% from the year-ago recorded number.
SummaryNike is downgraded to hold due to mounting concerns over dividend sustainability and deteriorating fundamentals.NKE's dividend yield has surged to 4.8% from share price declines, but payout ratios now exceed 100% of forward EPS guidance.Free cash flow coverage is insufficient too, with recent quarters showing negative FCF and trailing 12-month FCF below dividend requirements.Persistent sales declines in Greater China, weak sell-through, and elevated inventory signal continued headwinds and limited turnaround visibility.Looking for a portfolio of ideas like this one? Members of Envision Early Retirement get exclusive access to our subscriber-only portfolios. Learn More » magical_light/iStock via Getty Images
Nike's Stock: a yield bargain or a dividend trap? We last covered Nike, Inc. stock (NKE) a bit more than 1 year ago in August 2025. The article rated the stock as Buy. After evaluating its EPS
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After a profitable company has fallen so out of favor and the stock price has been so beaten up, a feeling can build that the sell-off has been overdone. That may be what some feel about, or are hoping for, with Nike (NKE -0.72%), as the share price has fallen 77% over the past five years.
That said, there's one stat that's hard to ignore when considering whether to start or add to a position in the iconic shoemaker.
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Don't bet that the worst is over Over the years, Nike has made a series of missteps, including shunning wholesalers by focusing more on selling directly to customers and failing to meet changing consumer tastes through innovation. Elliott Hill has been trying to lead a revival of the brand since becoming CEO in 2024, but it's been slow going.
When the company reported earnings for its fiscal first quarter of 2027 on Oct. 1, its revenue was $11.2 billion, down 4% from the prior-year period. While Nike can at least say it's profitable, that profitability, too, is shrinking, as its net income of $712 million was a 2% decline.
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As bad as all that was, the most worrisome stat from the earnings report was that full-year revenue is likely to decline by high single digits. That means the next few quarters could keep getting worse, so this likely isn't the end of the stock price's woes.
Even though shares have sunk by around 77% over the past five years, there doesn't appear to be a catalyst on the horizon to reverse the losses -- aside from a surprisingly strong earnings report, which Nike seems to be warning is unlikely. At this point, before starting or adding to a position, it seems better to watch Nike's turnaround efforts from the sidelines and wait for a few good quarters to ensure there's real momentum to reverse the losses from the past five years.
Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy.
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Nike's (NKE -2.10%) stock struggles over the last half a decade have been striking. While the company was once one of the thriving giants of the consumer goods sector, failed growth strategies have turned it into one of the market's most high-profile disappointments.
Last month, Nike was removed from the S&P 100 index because its market capitalization had fallen below the level that qualified it for inclusion. For reference, the company had been a part of that index for 18 years. The company's share price is now down 81% from its late 2021 high, and its market capitalization has fallen from a peak of roughly $264 billion to roughly $51 billion. Does this massive pullback present a generational buying opportunity?
Image source: Getty Images.
Does Nike's beaten-down valuation and big dividend make it a buy? At current share prices, Nike's dividend offers a yield of roughly 4.8%. Its yield has never been higher, and the footwear and apparel giant has increased its payouts annually for 24 consecutive years. While it's unlikely that the company will enact a big payout increase in the near term, there's a solid chance that it will deliver another low-single-digit percentage increase this November that helps sustain the relative value of its dividend in the face of inflation.
With a payout increase this fall, Nike would achieve a quarter-century streak of dividend payout growth. That would be an impressive feat -- and one that the company's leadership team may wish to achieve specifically to shore up shareholder confidence. On the other hand, income investors should approach the stock with the understanding that there is a real risk of a payout cut at some point.
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At the beginning of this month, Nike published results for its fiscal 2027 first quarter, which ended Aug. 31. Sales in the period fell 4% year over year to $11.2 billion, and the company guided for a high-single-digit percentage revenue deterioration for the full year.
Crucially, management expects that sales weakness in the company's Greater China geographic segment will continue through the remainder of the current fiscal year and into fiscal 2028. Nike is facing a structural demand problem in the geographic market that management put at the center of its growth strategy over the last decade, and it's now looking at a declining sales trajectory that has no clear end in sight as shoppers in the region continue to shun the brand in favor of local alternatives.
While Nike stock currently offers an attractive dividend yield, its payout ratio -- the share of net income that is required to cover the distribution -- looks dangerously high in light of the struggles the business is experiencing. Management will continue to seek ways to improve efficiency, but it will likely also need to increase spending in some areas in hopes of improving its long-term competitive footing. With that in mind, investors should understand that expecting continued dividend payouts at current levels is a risky proposition -- and news of a payout cut could trigger further sell-offs.
Key Takeaways NIKE's 20.12X forward P/E exceeds the industry average of 17.3X despite recent stock weakness.FY27 revenues are expected to fall in the high single digits, while EBIT is projected to decline faster.NIKE faces weakness in Sportswear, Jordan Brand and Greater China as turnaround benefits remain delayed. NIKE Inc. (NKE - Free Report) stock has been volatile in recent months, reflecting weakening demand, margin pressure and ongoing business-reset actions. However, its current forward 12-month price-to-earnings (P/E) ratio of 20.12X raises valuation concerns. This multiple exceeds the Zacks Shoes and Retail Apparel industry average of 17.3X, making NIKE’s stock appear relatively expensive.
Adding to investor caution, the company’s elevated price-to-sales (P/S) ratio affects enthusiasm. The Beaverton, OR-based athletic giant trades at a forward 12-month P/S of 1.11X, above the industry’s 1.04X. Together with its Value Score of D, this suggests that NIKE may not present a compelling value opportunity at current levels despite its strong fundamentals and brand leadership.
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NIKE’s Premium Valuation Surpasses PeersAt 20.12X P/E, the Swoosh brand owner is trading at a much higher valuation than its competitors. Its peers, such as adidas AG (ADDYY - Free Report) , Steven Madden (SHOO - Free Report) and Wolverine World Wide (WWW - Free Report) , are delivering solid growth and trade at more reasonable multiples. adidas, Steven Madden and Wolverine have forward 12-month P/E ratios of 12.57X, 17.84X and 10.52X — all lower than that of NIKE. At such levels, NKE’s valuation seems out of step with its growth trajectory, especially given the recent decrease in its stock price.
NIKE’s elevated valuation underscores investors’ high growth expectations. However, compared with key competitors, the company appears increasingly vulnerable as market participants turn cautious toward overpriced Consumer Discretionary stocks. NKE’s ability to consistently deliver on or exceed these expectations will be critical to sustaining its premium valuation.
NIKE shares have lost 22.9% in the past three months compared with a 19.7% decline in the broader industry. The stock has also underperformed the Consumer Discretionary sector’s 5.7% decline and the S&P 500’s 2% growth in the same period.
NIKE’s performance has been relatively dismal compared with its peers. Shares of Wolverine World Wide and Steven Madden have outperformed NKE in the past three months, recording 10.4% and 14.6% growth, respectively. Meanwhile, shares of adidas have underperformed NKE with a 24.9% decline.
NKE’s 3-Month Stock Performance
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At the current price of $33.96, the NKE stock trades close to its 52-week low of $31.94 reached on Oct. 2, 2026. The recent fall to the 52-week low was led by the company’s dismal first-quarter fiscal 2027 results on Oct. 1. The current stock price is 53.1% below its 52-week high mark of $72.39. NKE trades below its 50 and 200-day moving averages, indicating a bearish sentiment.
What’s Hurting NIKE’s Stock PerformanceNIKE’s recent share-price pressure appears fundamentally tied to concerns that its turnaround will take longer and involve greater near-term earnings pain. First-quarter fiscal 2027 revenues declined 4% on a reported basis and 5% on a currency-neutral basis, underscoring persistent weakness across several key businesses.
NIKE Sportswear, Jordan Brand and Greater China remain the primary drags, offsetting solid momentum in the Performance portfolio. Sportswear declined in the low double digits, hurt by a nearly 50% reduction in Dunk revenues, weaker-than-expected sell-through of aged footwear and softer lifestyle traffic. Management also acknowledged broader marketplace pressure and a lack of energy in the lifestyle category.
Jordan Brand is another near-term headwind. Revenues fell in the mid-teens as NIKE deliberately reduces the volume and frequency of retro launches to restore scarcity and strengthen brand positioning. While strategically necessary, these actions are expected to weigh on sales, particularly in North America.
Greater China remains even more challenging, with revenues down 26% as NIKE restructures digital distribution, removes discount-heavy channels and works to improve inventory health. Management expects revenues and profitability in China to remain pressured for multiple seasons.
The outlook further explains investor caution. NIKE expects fiscal 2027 revenues to decline in the high-single-digit range, with EBIT falling faster than sales due to gross-margin pressure, fixed-cost deleverage and higher input costs. Although the Pace restructuring is expected to generate $2.5 billion in savings, most benefits are not expected until fiscal 2029-2030, reinforcing a prolonged “pain before gain” narrative.
NIKE’s Estimate Revision TrendThe Zacks Consensus Estimate for NIKE’s fiscal 2027 and 2028 earnings per share (EPS) have moved south, with estimates declining 3% and 2.3%, respectively, in the past seven days.
Image Source: Zacks Investment Research
For fiscal 2027, the Zacks Consensus Estimate for NKE’s revenues implies a 7% year-over-year decline, while the same for EPS suggests 1.3% growth. The consensus mark for fiscal 2028 revenues and EPS indicates 9.5% and 32.6% year-over-year growth, respectively.
Is NIKE Still Worth a Shot?NIKE’s first-quarter fiscal 2027 performance underscores the near-term pains surrounding its turnaround. Persistent weakness in Sportswear, Jordan Brand and Greater China, coupled with expectations for a high-single-digit revenue decline and greater pressure on EBIT, suggests that a meaningful recovery may take time. Against this backdrop, NIKE’s premium valuation looks difficult to justify, particularly as the stock continues to decline and trades near its 52-week low.
The negative estimate revision trend adds another concern. Although management’s restructuring efforts and Performance portfolio strength could support longer-term improvement, the current outlook remains subdued and execution risks are elevated.
Given the combination of a premium valuation, deteriorating share-price performance, downward earnings estimate revisions and a weak near-term operating outlook, investors may be better off staying on the sidelines. NIKE currently carries a Zacks Rank #5 (Strong Sell), and it appears prudent to avoid the stock until clearer signs of revenue stabilization, margin recovery and improving earnings momentum emerge.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of NKE either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
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