Nike closed Monday at its lowest level in over a decade as the sportswear titan's turnaround woes continued to weigh on its stock price. Yet, some analysts see reasons for hope.
Shares dropped 4% to $39.09 on Monday to notch their lowest close since 2014. Nike finished as the worst-performing stock in the Dow Jones Industrial Average, shaving 9.75 points off the index.
The company's sweeping turnaround effort, referred to as its "Win Now" strategy, hasn't been a quick pivot, as evidenced by the share price. The stock peaked above $170 in November 2021, driven by momentum in its direct-to-consumer digital shift. By October 2024, it had fallen to around $79, around the time current CEO Elliott Hill came out of retirement to assume the company's top role.
Shares have continued to slide, sinking 37% in 2026 and considerably lagging the broader market, which has gained 13% over the same period. The past few months have offered little relief with a steady stream of underwhelming updates failing to arrest the stock's decline.
In June, Nike appointed former Pfizer executive David Denton chief financial officer, though analysts remained skeptical that the hire alone could reignite the company's turnaround. Days later, fiscal fourth-quarter results topped analysts' estimates, but persistent weakness in markets outside the U.S. overshadowed the better-than-expected results.
Then there was the 2026 FIFA World Cup, which was expected to be a meaningful tailwind for sportswear overall but failed to give shares a lift. HSBC analyst Akshay Gupta noted at the time that near-term sales showed no signs of turning around, warning that any temporary bump would likely be short-lived.
Jefferies analyst Randal Konik remains cautiously optimistic, arguing that Nike's path back to higher operating profit margins remains intact. Konik remarked at the time of Nike's last earnings report that its much-watched China reset was progressing, while its performance sports business continued to build momentum.
While the company's sportswear and Jordan brands continue to drag on performance, conditions are at least stabilizing, Konik wrote. Management expects sales across these lines to remain in negative territory through 2027, with a recovery expected to pick up in the back half of the year.
Other analysts were less optimistic. J.P. Morgan downgraded Nike stock to Underweight from Neutral on Aug. 4, citing the financial toll of the company's "Win Now" strategy. Management commentary and regulatory filings suggest Nike's turnaround will dent profits in the second half of 2027 and into fiscal 2028, analysts said.
These shifts unfold against a soft demand environment. Needham analysts pointed out that only seven sneaker releases sold out "at meaningful volume" in July, marking a notable step down from 21 "high-heat launches" in the same period last year.
The most noteworthy development was the poor performance of Nike's Jordan sneakers. Despite the reduced supply of Jordans from last year, with six launches versus eight in July 2025, "not a single one of July's retro Jordans is trading at a resale premium at the moment," analysts wrote. "Thus, it still seems as though the Jordan brand is facing a difficult demand environment."
For now, Wall Street remains divided on whether Nike can truly regain its footing. Investors will have to wait and see if the brand can outrun its deepest slump in years.
Comments