Nike stock has fallen so far that the numbers almost look like a typo. Shares traded around $36 on September 16, leaving the athletic-wear giant roughly 80% below the record levels reached in late 2021 and about 49% lower over the past year alone. The collapse has turned what was once one of the market’s premium consumer-growth stocks into a turnaround story — and prompted a fresh bullish argument from investors who believe Wall Street has become too pessimistic.
The attraction is obvious. Nike remains one of the world’s dominant sports brands, still generates more than $46 billion in annual revenue and trades at a dramatically lower valuation than during its pandemic-era boom. Wholesale sales have started growing again, its running business is gaining momentum, and CEO Elliott Hill is trying to undo strategic mistakes that weakened retailer relationships and allowed competitors to take share.
But an 80% decline does not automatically make Nike stock cheap.
The company still faces deteriorating sales in China, weak Nike Direct traffic, intense competition from brands including Adidas, On, Hoka, Anta and Li Ning, and a turnaround that management itself has repeatedly described as uneven. The question investors should be asking is therefore not whether Nike can rebound from $36.
It is whether the business has finally stopped getting worse.
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80% Collapse Has a Very Real Business Story Behind It
Problems did not begin with a recession or a single bad product cycle.
For several years, the company deliberately pushed harder into direct-to-consumer sales while reducing its reliance on wholesale partners. That strategy offered an appealing financial promise: sell more sneakers through Nike’s own stores and apps, cut out the retailer and keep more of the margin.
The problem was what happened to the marketplace.
As Nike pulled back from retailers, competitors filled the shelf space. Hoka and On grew rapidly in running. Adidas regained momentum. In China, domestic companies such as Anta and Li Ning became more relevant to local shoppers.
Nike’s own digital business then slowed sharply.
Fiscal 2026 Nike Direct revenue fell 6% to $17.7 billion. Nike Brand Digital sales declined 12%, while comparable store sales fell 4%. Meanwhile, wholesale relationships — which Hill has made a major part of the turnaround — began recovering.
Elliott Hill Is Trying to Rebuild
Hill returned to Nike as CEO in October 2024 with a strategy centered on sport, product innovation and repairing wholesale partnerships.
The company has since tried to reduce excessive discounting, clean up older lifestyle franchises, put newer products back at the center of marketing and rebuild relationships with large retailers that had become less important under the previous direct-to-consumer strategy.
There are early signs that parts of that plan are working.
North American sales increased in Nike’s latest quarter, while wholesale revenue posted another gain. Performance categories have also strengthened. Running has produced multiple consecutive quarters of double-digit growth, according to management commentary around the fiscal fourth quarter.
The 2026 World Cup offered another opportunity to put the brand back in front of global consumers. Nike launched new football products and increased retail visibility as it attempted to challenge Adidas during one of the world’s largest sporting events.
Those moves support the turnaround case.
But Nike’s headline financial results still show why investors remain skeptical.
$46 Billion of Revenue Has Stopped Growing
Nike generated $46.4 billion of revenue in fiscal 2026.
That was essentially unchanged from the previous year on a reported basis and down 2% after adjusting for currencies. Fiscal fourth-quarter revenue fell another 1% to $11.0 billion and declined 4% currency-neutral.
For a mature company, flat revenue is not necessarily catastrophic.
For Nike, it is a major change in expectations.
Investors once paid a premium multiple because Nike combined global brand power with dependable growth. Today, the company is fighting simply to stabilize sales while newer competitors attack some of its strongest categories.
The current weakness is particularly obvious when Nike Direct is examined separately. Fiscal 2026 Direct revenue fell to $17.7 billion from $18.8 billion, while digital revenue declined to $8.6 billion from $9.6 billion.
Nike has to prove that consumers still want enough new products at full price to offset the decline in aging franchises and discounted inventory.
China Is the Number That Could Break the Bull Case
Greater China may be the most important reason Nike stock remains near decade-plus lows.
Fourth-quarter sales in the region fell 17%, extending a long string of declining quarters. Reuters reported in July that Nike had suffered eight consecutive quarters of falling China sales.
Fiscal 2026 China revenue was approximately $5.85 billion, making the region too large to ignore.
The problem is not simply weak Chinese consumer spending.
Nike is fighting stronger local competitors, changing tastes and years of aggressive discounting that damaged its premium positioning. Anta and Li Ning have improved their products and marketing, while newer global competitors are also fighting for athletic consumers.
Nike is responding by trying to regain greater control over distribution and pricing. Reuters reported that it is restricting online selling rights for some Chinese retail partners and developing more localized products.
That could eventually improve brand health.
It could also make reported sales weaker before they improve.
This is what makes the turnaround difficult to value. The actions required to repair the brand — reducing discounting, cutting old products and tightening distribution — can initially make revenue look worse.
Investors therefore need to distinguish shrinking sales caused by strategic cleanup from shrinking sales caused by customers simply choosing other brands.
The next earnings report should provide another important clue.
October 1 – The Day That’ll Matter
Nike is scheduled to report fiscal first-quarter 2027 results on October 1.
Expectations are already low.
Management warned in June that the difficult operating environment would extend into fiscal 2027, with revenue expected to decline again during the first half. Consumer pressure, tariffs and ongoing weakness in China remain significant headwinds.
That creates an interesting setup.
When expectations are extremely pessimistic, a company does not necessarily need spectacular results to move its stock higher. It may only need to show that deterioration has stopped.
Investors should pay particular attention to North America, China, wholesale growth, Nike Direct and gross margin.
The inventory number matters too.
Nike ended fiscal 2026 with $7.5 billion of inventory, essentially unchanged from a year earlier. The company said unit inventories actually increased, although product mix helped offset that increase in dollar terms.
That does not indicate a disastrous inventory pileup, but it also means the cleanup is not complete.
The Valuation Is Finally Interesting
At roughly $36 per share, Nike trades around 17 times trailing earnings using current market data, although normalized earnings during the turnaround make valuation unusually difficult. Consensus forecasts cited by MarketBeat expect earnings of approximately $1.74 per share in the current year before recovering toward $2.30 next year.
A 17-times earnings multiple would once have looked extraordinarily inexpensive for Nike.
But the current company deserves a different comparison than the Nike of 2021.
Revenue is stagnant. China is shrinking sharply. Margins remain below historical levels. Competition has intensified.
Morgan Stanley recently moved to an Underweight view with a $31 price target, arguing that expectations for the turnaround — especially in China — could still be too optimistic. Most analysts tracked in the same report were more neutral, highlighting just how divided Wall Street has become.
That disagreement is exactly what investors would expect around a turnaround.
If earnings eventually recover toward historical levels, today’s share price could look unusually low.
If earnings estimates keep falling, a low stock price by itself offers no protection.
One Part of the Old Nike Has Survived: The Dividend
Nike continues to return cash to shareholders even while its operating business struggles.
The company declared another quarterly dividend of $0.41 per share in August. Nike also notes that it has increased its annual dividend consistently for more than two decades.
At a stock price near $36, the current annualized dividend of $1.64 represents a yield of roughly 4.5%.
That is dramatically higher than investors historically received from Nike.
The yield could provide some support, but it should not be confused with a guarantee. Dividends are ultimately financed by the underlying business, so sustainable earnings and cash generation remain more important than the percentage yield created by a falling share price.
Nike’s ability to maintain the payout is therefore another reason the turnaround matters.
Stock Doesn’t Need a Miracle
The bullish argument around Nike stock is becoming easier to understand.
The shares are almost 80% below their former peak. Wholesale relationships are improving. Running has regained momentum. Management is reducing discounts, increasing performance innovation and repositioning the company around sport. Nike still generates tens of billions of dollars of annual revenue and retains enormous global brand recognition.
But the bearish evidence remains just as concrete.
China sales fell 17% last quarter. Nike Direct continues to shrink. Fiscal 2026 revenue did not grow. Management expects another difficult period in fiscal 2027, and competition has become much stronger than when Nike commanded its old valuation.
Investors do not need to see the company return immediately to double-digit growth. The more realistic milestones are simpler: China declines becoming less severe, wholesale growth continuing, Nike Direct stabilizing, margins improving without one-time benefits and new performance franchises offsetting the products Nike is deliberately pulling back.
If those signals begin appearing simultaneously, an 80% drawdown will look very different.
If they do not, the stock’s dramatic decline may prove less important than the business problems that caused it.
The company has already lost the valuation investors once gave it.
The next phase depends on whether Elliott Hill can prove that Nike has stopped losing the consumer.
Disclaimer
This article is for informational purposes only and does not constitute financial or investment advice. Readers should conduct their own research and, where appropriate, consult a qualified financial advisor before making investment decisions. This article was researched and drafted with the support of AI, then reviewed, fact-checked and edited by the editorial team before publication.
