The most recognized brand in sports is trading at a 9-year low.
You know Nike. Everyone knows Nike. It’s the biggest sportswear brand on the planet - $46 billion in annual revenue, selling everything from Air Jordans to running shoes in virtually every country on earth. But the stock has been in freefall. On Tuesday, Nike reported quarterly results that beat estimates on both revenue and earnings. The market didn’t care. Management warned that China sales would drop 20% next quarter and that overall revenue would decline. The next morning, Goldman Sachs, JPMorgan, and Bank of America all downgraded the stock. It crashed over 15%, landing at its lowest price since 2017.
The problems are piling up. CEO Elliott Hill is 18 months into a turnaround that’s taking longer than Wall Street wanted. Tariffs on goods from Vietnam and China are costing Nike $1.5 billion a year. And brands like On Running and Hoka are stealing market share. On the other hand, this is Nike at its cheapest in nearly a decade, paying a 3.75% dividend yield with over two decades of consecutive increases. Is the world’s most famous brand a bargain, or is something fundamentally broken?
Here's how the community voted
This is Nike at fire-sale prices - The stock is down over 45% from its 52-week high and over 70% from its all-time peak. At a P/E of ~28 and a 3.75% dividend yield with over two decades of consecutive increases, this is the cheapest Nike has been in nearly a decade. World-class brands at distressed prices don’t come around often.
The turnaround is showing early signs - CEO Elliott Hill is rebuilding wholesale relationships and refocusing on product. North America grew 3% last quarter, the North America wholesale channel jumped 11%, and inventory cleanup is progressing. The 2026 FIFA World Cup is a major marketing catalyst ahead.
The brand is still unmatched - No competitor has Nike’s global distribution, marketing machine, or cultural relevance. On Running and Hoka are growing fast, but off a tiny base. Nike generated $46 billion in revenue last year. The challengers aren’t even close.
China is in freefall - Greater China revenue has declined for seven straight quarters, and management just warned it’ll drop 20% next quarter. China is 15% of Nike’s annual sales, and competitors like Anta and Li Ning are gaining ground. This isn’t a blip - it’s a structural problem.
Tariffs and margins are squeezing hard - Nike makes half its shoes in Vietnam and 27% in China, facing tariff rates that range from 20% to over 50% depending on the country. That’s costing roughly $1.5 billion a year. Gross margins fell 130 basis points last quarter, and further tariff hikes could make things worse.
Wall Street is losing patience - Three major banks downgraded the stock the morning after earnings. The CEO admits the turnaround will “take a while.” Q4 guidance calls for a 2-4% revenue decline when analysts expected growth. At some point, cheap stops being a bargain and starts being a warning.
This is Nike at fire-sale prices - The stock is down over 45% from its 52-week high and over 70% from its all-time peak. At a P/E of ~28 and a 3.75% dividend yield with over two decades of consecutive increases, this is the cheapest Nike has been in nearly a decade. World-class brands at distressed prices don’t come around often.
The turnaround is showing early signs - CEO Elliott Hill is rebuilding wholesale relationships and refocusing on product. North America grew 3% last quarter, the North America wholesale channel jumped 11%, and inventory cleanup is progressing. The 2026 FIFA World Cup is a major marketing catalyst ahead.
The brand is still unmatched - No competitor has Nike’s global distribution, marketing machine, or cultural relevance. On Running and Hoka are growing fast, but off a tiny base. Nike generated $46 billion in revenue last year. The challengers aren’t even close.
China is in freefall - Greater China revenue has declined for seven straight quarters, and management just warned it’ll drop 20% next quarter. China is 15% of Nike’s annual sales, and competitors like Anta and Li Ning are gaining ground. This isn’t a blip - it’s a structural problem.
Tariffs and margins are squeezing hard - Nike makes half its shoes in Vietnam and 27% in China, facing tariff rates that range from 20% to over 50% depending on the country. That’s costing roughly $1.5 billion a year. Gross margins fell 130 basis points last quarter, and further tariff hikes could make things worse.
Wall Street is losing patience - Three major banks downgraded the stock the morning after earnings. The CEO admits the turnaround will “take a while.” Q4 guidance calls for a 2-4% revenue decline when analysts expected growth. At some point, cheap stops being a bargain and starts being a warning.
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Nike has real potential.
Speaking just from a consumer perspective, it got tougher to get a hold of their products whether due to prices, availability, or distribution for a few years. I think they shifted their focus away from reasonably good shoes to things that were too expensive and maybe more trendy/fashionable - I was not that consumer. I tried a few other brands like Skechers, Puma, etc., but I was glad when I was shopping at the outlet stores recently and saw how affordable Nike shoes became.
This is the niche I can at least relate to - they are a brand I trust and as long as they maintain their shoe quality, and keep them at a reasonable price, I'd prefer to just buy the same shoe for as long as time allows. And because this is the niche I relate to, and I feel I'm coming back, others may follow.
Looking at the earnings and share price chart, I think the markets got a bit too drunk on the growth story without realizing these are just shoes and the more trendy or fashionable they are, the more easily demand can go away. If this higher price tier stuff gets modestly flushed out, I don't mind picking up Nike at the right price. The other brands I tried just did not impress me.
Maybe I'm a sucker for a potential value trap, but 3.75% dividend to wait for Nike to turn it around... really doesn't seem like the worst trade going. $64b market cap vs some of the nonsense valuations seen on here e.g ARM last week feels like a safe haven almost.