Nike shares are at their lowest levels in 12 years. The stock of the American sportswear giant is in crisis on Wall Street, and last Thursday it collapsed to $38.44. For the company, this is the lowest level since 2014. The most significant figure, however, emerges when looking at the long term. Since its all-time high of $177.51 reached in November 2021, Nike shares have lost nearly 80%. In the last year alone, moreover, the stock has seen its market value practically halved.
No R&D, too many products
The crisis comes from afar and according to analysts there are deeper detailed causes than (changed) consumer preferences. The first critical element concerns the stagnation of innovation. Under the management of former CEO John Donahoe and with the implementation of the Consumer Direct Offense plan, the company has progressively reduced investments in research and development of disruptive designs. The choice was to push the monetization of classic mass models to the maximum, including the Air Jordan 1, Dunk and Air Force 1. But this overexposure ended up saturating the market, nullifying the perception of scarcity of the products and leaving the technical segment completely uncovered.
Fewer shop windows, fewer sales opportunities
Added to this factor is the negative impact of the “cut” with traditional distribution channels (to push their own, such as single-brand stores and the app). The partial interruption of partnerships with key chains such as Foot Locker (subsequently reversed and renegotiated) and Dick’s Sporting Goods deprived the group of strategic physical storefronts. The absence from stores has paved the way for emerging brands such as On and Hoka, as well as aiding the competitive recovery of Adidas and Brooks.
Full warehouses
On the operational front, the decline in direct demand generated a strong accumulation of inventories in warehouses. To dispose of excess inventory, Nike had to apply aggressive discounts that eroded margins and compromised the brand’s premium image. At the same time, the recovery on the Chinese market remained below expectations due to the local economic slowdown and the strong growth of domestic competitors such as Anta and Li-Ning. Industry data confirms that Nike’s global share in sports footwear has progressively decreased to around 22.9%.
Nike Digital in trouble (and freezing Chinese market)
In the fiscal two-year period 2025-2026, Nike’s economic-financial results fully reflect the group’s contraction and reorganization phase. Last year overall revenues fell to approximately $46.3 billion, marking a decline of around 10% on an annual basis, driven above all by the collapse of direct digital sales (Nike Digital) and the constant weakness of the Chinese market.
A slow (and tiring) turnaround
As regards the prospects, Wall Street estimates a slow turnaround process, the financial effects of which will become visible no earlier than the two-year period 2026-2027. Hill’s strategy aims to rebuild the wholesale network to recover lost volumes, reposition the company’s focus on sports performance technology and rationalize the “historic” product lines to restore pricing power (too many available versions of ‘legendary’ models, Nike wants to recreate the ‘scarcity effect’). Will it be enough to bring back the aura of mythology to the “swoosh”?