Nike's Turnaround Falters: Profits Halved, Sales Dip

Nike brought veteran executive Elliott Hill back from retirement in October 2024, hoping for a swift recovery. However, two years later, the company's market value and earnings have significantly declined. This unfinished turnaround was underscored by recent announcements of further job cuts and a forecast for steeper-than-expected sales and profit decreases for the fiscal year concluding in May 2028.

Analysts suggest that conditions may worsen before improving, with most savings from the company's overhaul not anticipated until fiscal years 2029 and 2030. Nike continues to flag underperformance in its sportswear division, challenges in the crucial China market, and issues with its legacy Jordan brand, which collectively represent over half of its total sales.

These persistent difficulties are testing investor confidence in CEO Hill's strategy ahead of the investor day on November 16-17, 2026. Hill's return aimed to mend relationships with wholesalers and refocus product development on sports after a period that prioritized direct sales and lifestyle products. Despite efforts to rebuild retailer ties, revenue continues to fall across both wholesale and direct channels, with shares trading at a 12-year low.

The situation in China, once a key growth driver, remains challenging, with stabilization expected to take multiple seasons and impact profitability. The Jordan brand is also undergoing a strategic shift to restore premium growth by reducing retro sneaker releases after years of oversupply and discounting. Nike acknowledges a lack of innovation in the lifestyle space, which is affecting customer traffic, and recognizes its responsibility as an industry leader to reintroduce creativity into this category.