Nike’s turnaround stalls as shares slip 8% and profit recovery pushed to 2029
Nike announced another round of job cuts and forecast steeper-than-expected sales and profit declines for the fiscal year ending May 2028, two years after bringing back CEO Elliott Hill to reverse falling market value and earnings. The company said most of the cost‑savings from its overhaul will not be realized until fiscal 2029 and 2030, and its shares fell about 8% to $32.22 in early Friday trading, near their lowest level in a dozen years. Hill acknowledged that fixing weaknesses in China and the Jordan brand will take multiple seasons and will continue to weigh on profitability.
The job cuts are part of a broader effort to simplify operations and rebuild relationships with retailers after a prior strategy that emphasized direct sales and cut wholesale ties. Nike’s sportswear, China operations and Jordan brand together account for more than half of total sales, yet all three remain problem areas. Analysts expect the upcoming investor day on November 16‑17 to provide a clearer roadmap for restoring growth, though they warn that brand‑level issues—not just cost cuts—are driving the decline. Hill said the company has been oversupplying its iconic retro Jordan sneakers and needs to bring back more innovation and creativity to the lifestyle category.
“Things are going to get worse before they get better,” Piral Dadhania, analyst at RBC Capital Markets said.
“Nike really needs to show that it can at least bail out problems faster than taking them on,” Neil Saunders, managing director of GlobalData said.
Before Hill’s return, Nike had pursued a strategy that prioritized direct-to-consumer sales, reduced reliance on wholesale partners and leaned heavily on a shrinking roster of lifestyle products instead of its core sports focus. That approach left the company with excess inventory, frequent discounting and strained retailer relationships. Hill was brought back in October 2024 to steady the business and refocus product development on sports.
What we know
When Nike brought Elliott Hill out of retirement in October 2024, investors hoped the company veteran would quickly reverse years of product missteps, rebuild relationships with wholesalers and restore the sportswear giant’s lost momentum.
Two years on, Nike’s market value and earnings have more than halved, while many of the problems Hill was hired to fix – from weakness in China to over-reliance on discounted lifestyle products – continue to weigh on the business.
Shares were down about 8 per cent at US$32.22 in early trading on Friday, around their lowest level in 12 years and far behind a 2021 peak of about US$175.
The unfinished turnaround was on display again on Thursday when Nike announced another round of job cuts and forecast steeper-than-expected declines in sales and profit for the fiscal year ending in May 2028.
That timeline was reinforced by Nike’s disclosure that most of the savings from its overhaul will not be realised until fiscal 2029 and 2030.