Why Is Nike Stock Falling, and Is It a Buying Opportunity?
Key Points
Nike's stock price has dipped 41.7% so far in 2026.
The iconic sneaker maker expects sales for fiscal 2027 to decline.
Nike is cutting over 1,000 jobs in a cost-saving measure.
- 10 stocks we like better than Nike ›
It's been a rough year for Nike (NYSE: NKE) shareholders, with the stock price diving 41.7% as of this writing. It's been even rougher for anyone holding shares over the past five years, with the stock price down 76.5%.
That said, as a profitable company with an iconic brand and a turnaround plan, Nike would appear to be a rebound candidate. Looking at what's ahead, however, shows that may just be irrationally optimistic thinking.
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The troubles at Nike
Over the years, Nike has faced headwinds due to a combination of a lack of innovation, failing to keep up with changing consumer tastes, and shunning wholesalers in favor of selling directly to consumers. In addition, it's struggling to find its footing in China, with total sales of $1.1 billion for its Greater China segment in the first quarter of fiscal 2027 down 22% from the prior-year period.
Looking at the business as a whole in that first quarter, sales of $11.2 billion were down 4%, while net income of $712 million was down 2%. So not only is the company bringing in less revenue, but it's also keeping less of what it's making. In a nod to a potential continued sales slump, Nike expects its fiscal 2027 full-year revenue to decline by a high-single-digit percentage. With all those challenges, Nike's stock price has had no room to do anything other than fall.
What this means for investors
With sales expected to decline in 2027, there's more room for things to get worse. There don't appear to be any near-term catalysts that could reignite investor enthusiasm, aside from meaningfully beating earnings forecasts in one of its upcoming quarters, which seems unlikely. Nike is planning to cut 1,400 jobs, which could lower costs, but that still won't boost sales or make shoppers excited to buy Nike products again.
Overall, at this point, investing in Nike in hopes of a turnaround is both a risk and an opportunity cost. Other companies are more likely to reward shareholders, and those potential gains could be missed if money is tied up in Nike stock, waiting for a turnaround.
Should you buy stock in Nike right now?
Before you buy stock in Nike, consider this:
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Jack Delaney 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.
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