NIKE, Inc., together with its subsidiaries, engages in the design, development, marketing, and sale of athletic footwear, apparel, equipment, accessories, and services worldwide. The company provides athletic and casual footwear, apparel, and accessories under the NIKE, Jumpman, Converse, Chuck Taylor, All Star, One Star, Star Chevron, and Jack Purcell trademarks. It also sells a line of performance equipment and accessories comprising bags, sport balls, socks, eyewear, timepieces, digital devices, bats, gloves, protective equipment, and other equipment for sports activities under the NIKE brand; and various plastic products to other manufacturers. In addition, the company markets apparel with licensed college and professional team, and league logos, as well as sells sports apparel; licenses unaffiliated parties to manufacture and sell apparel, digital devices, and applications and other equipment for sports activities under NIKE-owned trademarks; and operates digital platforms, including fitness and activity apps; sport, fitness, and wellness content; and digital services and features in retail stores. It sells its products to footwear stores; sporting goods stores; athletic specialty stores; department stores; skate, tennis, and golf shops; and other retail accounts through NIKE-owned retail stores, digital platforms, independent distributors, licensees, and sales representatives. The company was founded in 1964 and is headquartered in Beaverton, Oregon.

Компания Nike демонстрирует высокие мультипликаторы, такие как P/E и P/B, значительно превышающие медианные значения по отрасли, что указывает на переоцененность. Однако, некоторые показатели, такие как ROE и ROA, остаются на высоком уровне, что является положительным знаком для инвесторов. Тем не менее, наблюдается снижение выручки и чистой прибыли по сравнению с предыдущими годами, что вызывает опасения. Дивидендная доходность отсутствует, что может негативно сказаться на привлечении доходных инвесторов. Долговая нагрузка остается на относительно низком уровне, но динамика других финансовых показателей, таких как EBITDA и операционная прибыль, также указывает на ухудшение. В целом, несмотря на сильные стороны, такие как высокая ликвидность, общая картина показывает ухудшение фундаментальных показателей, что требует пересмотра целевой цены вниз.

Nike, Inc.

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Key Points
Nike’s turnaround is taking longer than hoped, sending the stock down 29% year to date.
The company's biggest market is showing improving sales.
But Nike still faces headwinds that may delay its turnaround.
As soon as it seems Nike (NYSE: NKE) stock has bottomed out, it continues to reach new lows. Its latest quarterly results show the turnaround is taking longer than investors expect. Revenue in fiscal 2026's Q3 (ended Feb. 28, 2026) was flat year over year at $11.3 billion, and earnings fell 35%. The stock tumbled after the report's release and is now down 29% year to date.
Patient investors may see the market's fear as a rare chance to buy an iconic consumer brand at a steep discount. There are reasons to believe Nike stock will eventually recover, but there are also reasons why it's not worth buying right now.
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Reasons to buy Nike stock
Nike's revenue and profitability didn't show the meaningful improvement investors were hoping for, but there were still a few silver linings.
Nike's largest market, North America -- which accounts for nearly half of total revenue -- showed signs of progress. Revenue in its home market rose 3% year over year, reversing the 4% decline in the same quarter last year. That improvement appears tied to stronger momentum in wholesale, along with deeper relationships with key sporting goods partners like DICK'S Sporting Goods and Foot Locker.
Another encouraging sign: Classic footwear franchises like the Air Force 1 and Air Jordan 1 are seeing sales stabilize. More importantly, running shoes -- Nike's bread-and-butter product category -- posted sales growth of more than 20%.
With these encouraging trends, management believes it can get back to more balanced revenue and profit growth in its largest market in the near term.
Reasons to be cautious with Nike
The positives are still offset by weakness in other areas of the business. While sell-through improved in February, it remained below management's expectations. That suggests products are sitting on retail shelves longer than Nike wants, which can limit the company's ability to reaccelerate growth.
Sportswear is also struggling to gain traction, creating another headwind. Sportswear revenue fell in the low-double-digit range during the quarter. Management also said online sales remain "too promotional," with discounting still doing too much of the heavy lifting.
Some of these issues may not reflect a weakened brand, but rather a combination of lagging product innovation and broader softness in consumer spending. Higher prices over the past few years have strained household budgets, and Nike may be feeling that pressure. If the economy improves and Nike refreshes its wardrobe offerings, today's headwinds could eventually become tailwinds.
Still, Nike's turnaround will take time. CEO Elliot Hill said the work being done on new products won't fully show up until spring 2027. That implies Nike may not deliver materially better revenue and earnings for at least a year, and that could leave the stock treading water until then.
And with the stock trading at 24 times next year's earnings estimates, Nike may not be the bargain investors are looking for. Investors might want to see further proof in the financial results before buying.
Should you buy stock in Nike right now?
Before you buy stock in Nike, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nike wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $497,606!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,306,846!*
Now, it’s worth noting Stock Advisor’s total average return is 985% — a market-crushing outperformance compared to 200% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Nike Stock Is Down and the Crowd Is Scared -- Is That Your Signal to Buy?

Key Points
Lululemon’s stock was cut in half over the past year.
Its sales growth is stalling out, and its margins are under pressure.
Lululemon's (NASDAQ: LULU) stock has declined 45% over the past 12 months. Investors who recall how quickly the athletic apparel maker grew in its heyday might be drawn to its stock as a turnaround play. Still, its situation probably won't improve until 2027 at the earliest.
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What happened to Lululemon?
In 2022, Lululemon launched its second "Power of Three" plan to double its men's revenues, double its digital revenues, quadruple its international revenues, and nearly double its total revenue (from $6.3 billion to $12.5 billion) from fiscal 2021 (which ended in Feb. 2022) to fiscal 2026. It set those goals after achieving its first "Power of Three" goals -- which set the same growth targets from fiscal 2018 to fiscal 2023 -- ahead of schedule.
But over the past four years, Lululemon's comparable-store sales growth has decelerated, and its gross margins have declined. In North America, its largest market, sales of women's apparel stalled as macro headwinds throttled consumer spending, the pandemic-era athleisure boom ended, and it faced fierce competition from smaller brands like Alo Yoga and Vuori.
Metric
FY 2022
FY 2023
FY 2024
FY 2025
Revenue Growth (YOY)
30%
19%
10%
5%
Comps Growth (YOY)
16%
13%
4%
2%
Gross Margin
55.4%
58.3%
59.2%
56.6%
Data source: Lululemon. YOY = Year-over-year.
That pressure forced Lululemon to use markdowns to boost sales, compressing its margins and diluting its premium appeal. Inflation and tariffs exacerbated that pressure. It fared better overseas, but that growth couldn't offset its persistent problems in North America.
To make matters worse, Lululemon lost two of its key leaders over the past year: its CEO Calvin McDonald and chief product officer Sun Choe, both of whom joined the company in 2018. It recently hired Heidi O'Neill, a former Nike (NYSE: NKE) executive, as its next CEO -- but Nike has also been struggling with many of the same challenges as Lululemon.
What will happen to Lululemon over the next few years?
For fiscal 2026, Lululemon expects revenue to grow only 2%-4% to $11.35 billion to $11.50 billion, which would miss its "Power of Three x2" target of $12.5 billion. Analysts expect its revenue to rise 3% to $11.5 billion as its EPS declines 7% to $12.31.
But for fiscal 2027, analysts expect its revenue and EPS to rise 4% and 8%, respectively, if the company achieves its near-term goals of stabilizing its North American business, selling a higher mix of full-price apparel, rolling out new products, and expanding overseas.
Lululemon's stock might seem cheap at 12 times this year's earnings, but it won't command a higher valuation until more green shoots appear. That probably won't happen for at least a few more quarters, so investors should temper their expectations for a near-term recovery.
Should you buy stock in Lululemon Athletica Inc. right now?
Before you buy stock in Lululemon Athletica Inc., consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lululemon Athletica Inc. wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $492,752!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,327,935!*
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*Stock Advisor returns as of April 28, 2026.
Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lululemon Athletica Inc. and Nike. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Lululemon Investors May Have to Wait Until 2027 For a Turnaround. Here's Why.

In early trading on Monday, shares of Verizon Communications topped the list of the day's best performing Dow Jones Industrial Average components, trading up 2.8%. Year to date, Verizon Communications registers a 17.1% gain.
And the worst performing Dow component thus far on the day is International Business Machines, trading down 1.5%. International Business Machines is lower by about 22.8% looking at the year to date performance.
Two other components making moves today are Apple, trading down 1.3%, and Nike, trading up 1.4% on the day.
VIDEO: Dow Movers: IBM, VZ
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Dow Movers: IBM, VZ

Key Points
Higher tariffs will add an incremented $1.5 billion to Nike’s product costs in the U.S., an unfortunate development that isn't in the company’s control.
With ongoing fundamental weakness driving the narrative, it's been a while since Nike looked like a smart buying opportunity.
Uneven progress across geographies means that a turnaround will take time.
There's no denying it. Artificial intelligence has been the hottest topic in recent years. But over the past 12 months, tariffs have attracted investor attention. And Nike (NYSE: NKE), a business with a global supply chain, has felt the negative effects.
What's more, the market has been anything but smooth this year. As geopolitical tensions rose with the start of the Iran war in late February, the S&P 500 index dropped 5% in March.
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Nike shares continue to feel the pain in this uncertain environment, as they are down 30% in 2026 (as of April 24) and significantly off their peak. In the face of tariffs and volatility, is this consumer discretionary stock still a long-term buy?
It's hard to remember the last time this sportswear giant was a smart buy
Nike holds a leadership position in the global sportswear market. However, that doesn't mean its success is guaranteed. The company hasn't proven in recent years that it's worthy of being a long-term investment.
This wasn't always the case. During the five-year period leading up to its record high in November 2021, the stock price surged 255% higher. This happened on the back of fundamental strength. Between fiscal 2016 and fiscal 2021, Nike's diluted earnings per share climbed at a nearly 11% annualized rate.
This certainly looked like a solid investment candidate at the time, boosted by the robust market environment in 2021. But investors are struggling to adopt a positive mindset today.
Nike's turnaround is taking time
While tariffs and volatility are headline topics that get a lot of attention, they aren't the most important variables impacting Nike's operations. This business has struggled for years now. Investors should turn their attention to the fundamentals.
Nike's problems stemmed from internal strategic blunders. It flooded the market with an inventory glut of classic footwear that lost its appeal. The previous CEO, understandably, focused the business more on direct-to-consumer channels than wholesale partnerships. And a lack of exciting product innovation opened up the door to competitive threats.
It's not all Nike's fault, however. To be fair, the surprise shift in trade policies was something completely outside its control.
Nonetheless, it has definitely hurt Nike. The leadership team said in December that higher tariffs would add an incremental $1.5 billion to product costs in the U.S. This resulted in gross margin contraction of 300 basis points in the latest quarter. The good news, though, is that trade-related headwinds should stabilize in the first quarter of 2027.
It's clear that a successful turnaround won't happen overnight. "It's taken longer than I would like," CEO Elliott Hill said on the Q3 2026 earnings call.
Until Nike's revenue and profit base start growing sustainably, this consumer discretionary stock is not worthy of your hard-earned savings.
Should you buy stock in Nike right now?
Before you buy stock in Nike, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nike wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $498,522!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,276,807!*
Now, it’s worth noting Stock Advisor’s total average return is 983% — a market-crushing outperformance compared to 200% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of April 27, 2026.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tariffs, Volatility, and Nike: Is It Still a Long-Term Buy?

Key Points
Warren Buffett believes in holding the right stocks forever.
While Nike has a well-known brand, it faces intense competition.
Lululemon Athletica doesn't have a permanent CEO.
You're in good company if you take a long-term approach to investing. After all, Warren Buffett, the famed Oracle of Omaha, stated that his favorite holding period is forever.
Investment success doesn't just depend on holding stocks for a very long time, of course. You have to choose companies that have the right characteristics for long-term success. This includes businesses that have competitive advantages.
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Investors also need to understand the companies that they invest in. Nike (NYSE: NKE) and Lululemon Athletica (NASDAQ: LULU) have become well-known brands, which gives you a good starting place before conducting a deeper dive.
After learning more about each company, does one deserve that special place as a forever holding?
Nike
Nike, which produced some memorable commercials over the years and teamed up with some high-profile athletes, has sold popular footwear and apparel for decades. In short, it became a powerhouse brand.
The company had a competitive advantage for a long time. These included a stream of innovative and new products that kept the revenue juggernaut going.
But Nike has hit a speed bump due to management missteps. This includes an over-reliance on its direct-to-consumer business that alienated wholesale partners, a lack of new products, and more intense competition from companies like On Holding (NYSE: ONON) and Deckers Outdoor's (NYSE: DECK) Hoka brand.
You can see the effects on Nike's revenue. The company's fiscal third-quarter top line dropped 3% after excluding foreign-currency translation effects. Revenue at its core Nike brand fell 2%. The most recent quarter ended on Feb. 28.
These issues have been ongoing and weighed on the stock price. Nike's shares have dropped 62.6% over the last three years through April 20. During this period, the S&P 500 index gained 71.7%.
Nonetheless, Nike's valuation doesn't seem particularly compelling, given the issues it faces in growing revenue meaningfully again. The shares have a price-to-earnings (P/E) ratio of 31, in line with the S&P 500's multiple.
Lululemon Athletica
Lululemon Athletica makes athletic apparel, including pants and shorts. Although high-priced, these have become very popular, particularly among younger women.
With the growing popularity of its products, Lululemon's revenue grew quickly. But it has slowed recently.
The company's fiscal fourth-quarter revenue grew 4% when using the comparable number of weeks in both periods and removing foreign-currency changes. The quarter ended on Feb. 1. Management expects a tepid 2% to 4% revenue increase this year. With increased competition from lower-priced alternatives and the inability to expand its brand's reach, Lululemon faces a tough task in revving up revenue growth.
Over three years, the share price has lost 55.7%.
It's no wonder that investors aren't happy. There have been rumblings, with the company's founder, Chip Wilson, waging a battle to make changes. This includes nominating three board members. Activist investor Elliot Management has also built a stake. But right now, these create questions rather than answers to boosting growth.
None of the above
I wouldn't make Nike or Lululemon part of my forever holdings. Both face challenges with revenue growth, and they don't have easy fixes. In fact, it's extraordinarily difficult to win customers back.
Given that, I'd keep looking for that forever stock to buy.
Should you buy stock in Nike right now?
Before you buy stock in Nike, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nike wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $498,522!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,276,807!*
Now, it’s worth noting Stock Advisor’s total average return is 983% — a market-crushing outperformance compared to 200% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of April 25, 2026.
Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Deckers Outdoor, Lululemon Athletica Inc., Nike, and On Holding. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Buy and Hold Forever? Here's How Nike and Lululemon Athletica Stack Up

How to Approach Stock Market Investing Through Surges and Falls

Key Points
Lululemon stock fell 13% after it announced former Nike exec Heidi O'Neill as its next CEO.
Both Luluemon and Nike have struggled in recent years.
O'Neill has a strong resume, but is also seen as being responsible for Nike's failed pivot to the direct-to-consumer channel.
Lululemon (NASDAQ: LULU) has been one of the best-performing apparel stocks of the century, as the company pioneered an entirely new category of clothes: athleisure.
However, over the last couple of years, the stock has been a downright disaster and is now down 72% from its all-time high at the end of 2023. Challenges facing the brand have included weakness in North America due to brand saturation, competition, and complaints about the product quality and lack of newness in its styles. Additionally, tariffs, including the removal of the de minimis exemption, hit the Canadian company hard, forcing it to rearrange its e-commerce supply chain for the U.S., where most of its revenue comes from.
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In the face of those headwinds, former CEO Calvin McDonald, who had led the company since 2018, said he would step down last December, leaving the board to search for its next CEO.
On Wednesday night, Lululemon announced that decision, naming longtime former Nike (NYSE: NKE) executive Heidi O'Neill as its next CEO, effective Sept. 8. Investors responded by dumping Lululemon shares, and the stock finished Thursday down 13.3%, wiping roughly $2 billion off its market cap.
It's not unusual for a stock to move on the announcement of a new CEO, especially when it's a high-profile company or one that's attempting a turnaround, but a double-digit percentage dive is extreme.
Did Lululemon just make a $2 billion mistake? Let's take a closer look at what O'Neill's selection means for the apparel company.
Why Lululemon chose a former Nike exec as its next leader
In the press release announcing O'Neill, the board cited "the breadth of her experience, her demonstrated success delivering breakthrough ideas and initiatives at scale, and her ability to be a knowledgeable change and growth agent."
O'Neill spent nearly 30 years at Nike, during a time when the company grew from less than $10 billion in sales to nearly $50 billion. She also previously worked at Levi Strauss, and has served on boards for companies like Spotify Technology and Hyatt Hotels.
Nike is the largest company in Lululemon's industry, and O'Neill's experience growing a company from the size of Lululemon today to a much larger business may have seemed particularly valuable to the board and likely distinguished her from other candidates.
Why investors jeered the move
While O'Neill's resume is clearly impressive with nearly three decades at Nike, it deserves some context.
Like Lululemon, Nike has struggled badly in recent years, with the stock down 75% since its peak in 2021. Nike is in the midst of its own turnaround under CEO Elliott Hill, though those efforts have yet to pay off. Hill let go of O'Neill as part of a leadership shake-up last year. O'Neill was a key leader of the direct-to-consumer (DTC) business under previous CEO John Donahoe, though the strategic shift to DTC, which neglected the traditional wholesale business, is now seen as a costly mistake by Nike that both stunted its own growth and allowed competitors like Deckers and On Holding to get more shelf space at Nike's retail partners.
It's unclear to what extent O'Neill deserves blame for that strategy, but that may explain why she is no longer with Nike.
The skepticism seems fair, but O'Neill deserves a chance
O'Neill is a seasoned industry executive. She would seem like a good fit for a healthy and growing Lululemon, but that isn't where the exercise apparel company is these days. It needs a visionary leader or a turnaround agent, someone capable of breathing new life into the brand and taking the product next level.
A leader with, say, start-up experience or who had executed a turnaround might have been seen as a better fit. Still, O'Neill deserves a chance, and her most recent experience isn't necessarily predictive of how she'll run Lululemon.
It's still several months before she takes over, and we'll hear from Lululemon at its nextearnings callin June. Some momentum in the business before O'Neill's arrival could go a long way toward improving investor sentiment toward the stock. There's still an attractive turnaround opportunity here with the stock at a price-to-earnings ratio of less than 11, but it's clear O'Neill will have to work to win over investors when she takes the reins.
Should you buy stock in Lululemon Athletica Inc. right now?
Before you buy stock in Lululemon Athletica Inc., consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lululemon Athletica Inc. wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $500,572!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,223,900!*
Now, it’s worth noting Stock Advisor’s total average return is 967% — a market-crushing outperformance compared to 199% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of April 24, 2026.
Jeremy Bowman has positions in Lululemon Athletica Inc. and Nike. The Motley Fool has positions in and recommends Deckers Outdoor, Lululemon Athletica Inc., Nike, On Holding, and Spotify Technology. The Motley Fool recommends Hyatt Hotels. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Did Lululemon Just Make a $2 Billion Mistake?

Key Points
Investor patience has reached a breaking point with Nike after years of disappointing results.
The company has addressed its most pressing challenges, but it still has a long way to go.
Nike still hasn't returned to growth, so it isn't cheap based on forward earnings estimates.
Tim Cook made headlines on April 20 when Apple announced he would step down as CEO to become executive chairman, effective Sept. 1, 2026. Cook has been CEO since 2011.
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But his tenure on the Nike (NYSE: NKE) board of directors dates all the way back to 2005. Cook has been making noteworthy purchases of Nike stock in recent months -- including 50,000 shares in December and another 25,000 shares in April.
Despite a broader market recovery in recent weeks, Nike is hovering around a 10-year low -- impacted by its 27% year-to-date decline and 62.7% collapse over the last three years.
The sell-off has pushed Nike's dividend yield to 3.5% -- making it the third-highest yielding stock among the 30 components of the Dow Jones Industrial Average, behind only Chevron and Verizon Communications.
Cook's purchase is a vote of confidence that the worst for Nike could be over, but it doesn't mean Nike will magically rebound overnight. Here's why Nike's investment thesis is shaken, why Nike has transformed from a growth stock to a high-yield dividend stock, and whether Nike is a buy now.
Execution errors have come at a steep price for Nike shareholders
The COVID-19 pandemic proved to be a very misleading time for Nike, as was true for many companies. Nike invested heavily in its direct-to-consumer (DTC) Nike Direct strategy -- which consists of Nike Digital through its website and app, as well as Nike-owned retail stores.
The idea thrived during the pandemic, as consumers naturally pivoted to online shopping and Nike Digital provided a streamlined option. But Nike went way too far by reducing ties with many of its wholesale partners. The idea backfired as COVID-19 restrictions eased and Nike came under pressure from familiar competitors, as well as newer ones like Deckers Outdoor-owned Hoka and On Holding.
Nike's earnings and margins began ticking down. And it became painfully obvious that Nike was more dependent on its wholesale partnerships than it cared to admit.
DTC gives Nike greater control over the buyer experience to make promotions more effective, cuts out the middleman nature of wholesale partners, and can theoretically boost margins by reducing operating costs. But it also makes Nike more responsible for aligning product quality and quantity with consumer interests.
If Nike overestimates demand or misses the mark on key design trends, it can be left holding a lot of unwanted inventory -- which forces discounts and losses. However, wholesale partners take some of that downside risk off Nike.
Nike's gradual road to recovery
Nike was caught flat-footed in the years following the pandemic, so it named Nike veteran Elliott Hill as CEO in October 2024 and tasked him with turning the business around. But the turnaround has taken far longer than some investors may have initially expected. Not only is Nike dealing with its own supply chain, marketing, and strategy issues, it is also facing a difficult operating environment for consumer discretionary spending in general, not to mention added tariff-related costs that are further straining its margins.
Nike's size, which used to be a core strength, is now one of its greatest weaknesses. The company is such a massive, diversified global business that it's difficult for a single market or theme to move the needle. So even though Nike is leaning more into sports -- especially running and football -- and its North American wholesale sales channels, it continues to be dragged down by Greater China, Converse, and its sportswear segment.
For the quarter, wholesale revenue increased 5%, but Nike Digital revenue fell 9%, and Nike-owned store sales dropped 5%. On the Aprilearnings call Nike said that it will return to providing full-year and long-term guidance at its Investor Day in the fall -- which is a red flag that Nike needs more time to chart a clear and attainable turnaround.
Nike isn't performing at the level needed to support its dividend
Nike's cash, cash equivalents, and short-term investments fell $2.3 billion to $8.1 billion in the third quarter of 2026 because cash dividends, share buybacks, bond repayments, and capital expenditures were higher than cash generated from operations. However, Nike did reduce its long-term debt by 12% year over year to $7.03 billion.
In November, Nike announced a 3% increase in its quarterly dividend, boosting the payout to $0.41 per share and marking the 24th consecutive annual dividend raise. However, it's difficult for investors to be confident in Nike's payout when its free cash flow can't cover its dividends and buybacks.
Given Nike's steep sell-off, you may think the stock would fetch a dirt cheap valuation. But analyst consensus earnings estimates of $1.50 per share in fiscal 2026 and $1.89 in fiscal 2027 point to a slow recovery. Nike's stock price at the time of this writing of $46.50 is still 24.6 times fiscal 2027 estimates, which isn't cheap at all.
Nike isn't a screaming buy
Nike is arguably one of the most difficult stocks to value in today's market. The company has overpromised and underdelivered for years, to the point where management isn't even providing full-year guidance. Its dividend yield is attractive, but it comes at the expense of depleting cash from the balance sheet. But to Nike's credit, cash, cash equivalents, and short-term investments are still higher than its long-term debt.
If Nike can recover to its pre-pandemic form, the stock will be too cheap to ignore. And there's reason to believe Nike is on the right path now that it has centered its focus on core product categories and is back to growing its wholesale business.
All told, it's probably best if most investors keep Nike on a watch list until it shows a clear path to dividend stability and earnings growth. However, those who are confident that its strategic shifts will pay off may want to step in and buy high stock now. Nike's dividend provides a worthwhile incentive to hold the stock through this period, though it means little if the stock's decline continues to outpace dividend income, as has been the case in recent years.
Should you buy stock in Nike right now?
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Daniel Foelber has positions in Nike. The Motley Fool has positions in and recommends Apple, Chevron, Deckers Outdoor, Nike, and On Holding. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Nike Is Now the Third Highest-Yielding Dividend Stock in the Dow Jones Industrial Average. Should You Follow Apple CEO Tim Cook's Lead and Buy Nike Near a 10-Year Low?

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