Nike Inc. has been hit with its largest decline in five years, as the company announced disappointing sales figures and a gloomy outlook for the near future. The iconic sportswear giant’s stock dropped sharply, closing at $67.94 on March 21, 2025, reflecting a 5.5% loss in one day alone. This marks a worrying trend, with the company’s stock down over 10% since the beginning of the year, pushing its market value below $100 billion for the first time since March 2020.
The sharp downturn comes after Nike forecasted a significant drop in revenue, predicting a decline of over 12% in the coming quarter. Sales in Nike’s key market, China, saw a massive 17% fall in the latest quarter. This drop in demand, particularly for the Jordan brand and classic footwear, has raised alarm bells for investors and analysts alike. Consumer behavior in China has been weak, and the company’s shipments in North America also faced delays, further exacerbating the sales slump.
Nike’s “Win Now” strategy, introduced by CEO Elliott Hill in October 2024, was meant to reverse these troubling trends. The plan focuses on strengthening Nike’s presence in key cities like Shanghai and Beijing, but so far, the results have been less than stellar. Analysts are growing concerned that the strategy is not delivering the expected turnaround, with some experts speculating that it could take much longer than anticipated for the company to regain momentum.
Nike’s inventory
To make matters worse, Nike’s inventory has piled up, and the company faces rising costs due to increased tariffs on imports from China and Mexico. CFO Matthew Friend has warned that clearing out outdated stock will take “several quarters” and involve heavy discounting, which could hurt the company’s profit margins even further. Nike’s forecast for a 400-500 basis point decline in gross margin for the upcoming quarter is higher than analysts expected.
Analysts at Barclays predict that it might take until the second half of Nike’s fiscal year 2026 to see a genuine recovery. Morningstar analyst David Swartz believes the company is still in the early stages of its recovery, although the process is taking longer than many had hoped.
Despite these setbacks, Nike is committed to its long-term growth strategy. The company plans to keep investing in its future, focusing on enhancing its brand and expanding its reach, though the road to recovery seems longer than expected. Investors and industry experts will be watching closely in the coming months to see if Nike can turn things around.
