Nike Shares Hit 12-Year Low as Weak Forecast Tests CEO's Turnaround Plan

Nike's shares plunged to their lowest level in 12 years after the company announced another round of job cuts and projected steeper-than-expected declines in sales and profit. The bleak outlook casts fresh doubt on the turnaround strategy led by CEO Elliott Hill, two years after he was brought out of retirement to restore the brand's momentum.

Turnaround Falters Amid Weak Guidance

In a announcement on Thursday, Nike warned of significant headwinds for the fiscal year ending in May 2028, prompting a sharp investor sell-off. The company's stock was down about 10% in premarket trading Friday, falling to approximately $31.58—a level not seen in over a decade and a stark contrast to its 2021 peak of about $175.

Nike also disclosed that most of the savings from its current overhaul will not materialize until fiscal 2029 and 2030, signaling a prolonged recovery. "Things are going to get worse before they get better," said Piral Dadhania, an analyst at RBC Capital Markets, in a note following the announcement.

Core Segments Continue to Struggle

The sportswear giant once again identified persistent weakness in key areas that together account for more than half of its total sales:

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• The Jordan Brand: CEO Elliott Hill admitted to oversupplying the market with retro sneakers, which diluted the brand's premium status. "Simply put we’ve been oversupplying our iconic retro product, asking them to do too much," Hill stated.
• China Market: Once a primary growth engine, the region remains a problem area. Hill acknowledged that efforts to stabilize the market will take "multiple seasons" and weigh on profitability.
• Lifestyle Sportswear: Hill noted that a "lack of energy in the lifestyle space" was hurting customer traffic and that the company needed to drive more innovation.

These issues persist despite Hill's efforts to rebuild relationships with retailers and refocus product development on core sports performance since his return in October 2024. Revenue has continued to decline across both wholesale and direct-to-consumer channels.

All Eyes on November Investor Day

The disappointing forecast places significant pressure on management ahead of Nike's investor day scheduled for November 16 and 17. Analysts and investors will be looking for a much clearer roadmap to restore growth and profitability.

Simeon Siegel, an analyst at Guggenheim, suggested management may have "preferred to get the 'bad news' out of the way to offer up a more positive tone in person." However, the scale of the challenges remains a primary concern. Neil Saunders, managing director of GlobalData, cautioned that while cost-cutting measures "will buy time," they are "not the solution to the brand problems that are the cause of decline."