Nike’s shares slipped to their lowest level in 12 years on Tuesday, capping a five-year decline of more than 75% as the athletic apparel giant grappled with persistent revenue weakness and shrinking profit margins.
The company, once regarded as a stable blue-chip equity, has seen its growth stall after a decade-long push to expand its direct-to-consumer business. Revenue growth, which averaged an 11% compound annual rate from fiscal 2020 to fiscal 2023, turned negative in fiscal 2024 and fell 10% in fiscal 2025. The slowdown reflected weaker North American sales, a stronger U.S. dollar and intensifying competition from brands such as Deckers’ Hoka, New Balance and On Holding in performance footwear and lifestyle sneakers.
Nike’s reliance on markdowns to drive sales contributed to margin erosion, with gross margin declining from 43.5% in fiscal 2023 to 42.7% in fiscal 2025. Earnings per share dropped from $3.23 to $2.16 over the same period. In fiscal 2026, revenue remained flat as North America stabilized but overseas markets, particularly China, weakened. EPS dipped 3% to $2.10, while gross margin edged up 20 basis points to 42.9%, attributed largely to a one-time tariff recovery rather than a structural improvement in pricing power.
Management has outlined a turnaround strategy centered on rebuilding relationships with wholesale partners, reducing excess inventory without compromising brand value, and launching new performance brands to diversify beyond core retro lines such as Air Force 1, Dunk and Air Jordan Retros. The company is also under pressure to counter the rise of domestic competitors in China, including Anta and Li-Ning, which have gained share in the performance and lifestyle segments.
Nike’s long-term revenue target of $50 billion, set in fiscal 2015 for fiscal 2020, remains unmet, with fiscal 2020 revenue reported at $37.4 billion. The company has since shifted focus to stabilizing operations and restoring investor confidence amid a challenging retail environment.
