What Would Warren Buffett Do With Nike Stock Down 38% in 2026?
Key Points
Nike's stock has been in decline for years, and 2026 has been particularly rough, with shares down 38%.
The iconic sneaker company is still in turnaround mode, and sales are expected to fall noticeably in its fiscal 2027.
In his 1996 letter to Berkshire Hathaway shareholders, Warren Buffett offered some sage advice on how investors should behave in situations like this.
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Nike's (NYSE: NKE) guidance for fiscal 2027 suggests things could get worse before they get better. The iconic athletic apparel company expects its sales to decline by a high-single-digit percentage, and there don't appear to be many catalysts on the horizon that could reverse the stock price's decline. As of this writing, the stock has fallen by 38% in 2026.
In times like these, it can be beneficial for a shareholder to take a step back and channel their inner Warren Buffett. He often offered valuable insights to retail investors, and there's one specific piece of his wisdom that Nike shareholders may want to consider as they weigh their next moves.
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What Nike shareholders can consider next
Buffett is known for making time an ally, preferring a buy-and-hold investing style. He's not quick to sell stocks, but one of his best investing lessons put him in a position throughout his career where he didn't have to make knee-jerk reactions during turbulent times.
"If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes," Buffett wrote in Berkshire Hathaway's 1996 shareholder letter.
For anyone who invested in Nike hoping for a quick turnaround, it hasn't materialized. And as more challenges lie ahead, this may be an ideal time for investors to evaluate their conviction in the stock.
If you don't believe the stock price can recover, or if you believe Nike management has had enough time to turn the business around, there's nothing wrong with considering whether it still belongs in your portfolio. Proceeds from selling Nike shares may be better used in a higher-conviction position.
On the flip side of that quote, those who believe brighter days are ahead for the company can give CEO Elliott Hill more time to revitalize the brand and, in turn, improve sales and profits. While Nike is becoming a more mature company and may not return to the days of 96% sales growth in a quarter (which it delivered in the fourth quarter of 2021), its sales can still stabilize, and renewed investor enthusiasm could provide some fuel for the stock price. Shareholders will also be rewarded with a dividend that yields 4.1% at the current stock price while they wait for the company's turnaround to show more signs of progress.
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 Berkshire Hathaway and Nike. The Motley Fool has a disclosure policy.
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