(Bloomberg) — When Michael Jordan quit pro basketball at just 30 years old, his exit created a headache for Nike Inc., the maker and massive beneficiary of his iconic line of sneakers.
Fast-forward to 2026, and the Jordan brand is one reason why the company’s shares are headed for their worst annual return since 1993, the same year “His Airness” retired for the first time.
The stock has plunged 39% this year as sales of Jordan-branded merchandise have slumped and Nike’s sportswear division struggles to compete with the likes of On Holding AG and Hoka parent Deckers Outdoor Corp. The company is also trying to reset its China operations after years of missteps, but its plan to cut off thousands of online distributors raises the risk of it losing more market share.
Shares of the company fell as much as 2.5% as of 11:02 a.m. in New York on Wednesday, on track for a third consecutive day of losses.
“Nike’s stock has struggled badly as the brand lost ground to nimbler competitors while its own pipeline of breakout new product failed to keep pace,” David Wagner, a portfolio manager at Aptus Capital Advisors, said in an interview. “A business built on being the cultural and innovation leader in its category is a much tougher hold once that edge dulls, and we’d rather own the disruptors than bet on a legacy leader clawing its way back.”
Nike is in the midst of a strategic overhaul introduced at the end of 2024 called “Win Now.” The plan intends to reverse a prolonged sales slump, stabilize market share and refocus the brand on sports like basketball and running. It’s the main focus for Chief Executive Officer Elliott Hill, a longtime Nike executive who took the top role in October 2024 after — as Jordan did in 1995 — coming out of retirement following a brief hiatus.
Hill’s greatest challenge has been reviving the brand after a series of blunders from the previous regime. Under former CEO John Donahoe, Nike had leaned too heavily on fad-prone lifestyle sneakers like Air Force 1s and Dunks and halted the flow of those products to third-party retailers, allowing rivals to fill the abandoned shelf space. From Donahoe’s arrival in January 2020 to his departure in October 2024, the shares declined about 20% versus a roughly 80% gain for the S&P 500 Index.
But Win Now hasn’t been a quick fix. Nike shares jumped about 7% on the news of Hill’s return, but have lost about half of their value since he took the helm. The decline has erased more than $60 billion in market value and left the stock trading near its lowest level since 2014. A drop in 2026 would mark five straight years of losses, extending a record skid.
“Investors are not buying into the rebound just yet,” said Brian Mulberry, chief market strategist at Zacks Investment Management, which exited its position in Nike about two years ago. For him, Hill’s comeback plan has not yet shown any “measurable progress” that would lead one to say, “oh, okay — it’s working.”
Improving wholesale relationships and supply chains won’t happen overnight, and a turnaround is likely still three or four quarters away, Mulberry said.
In general, athletic apparel retailers are dealing with weakness in North America. Following the release of their most recent earnings reports, Foot Locker-parent Dick’s Sporting Goods Inc., footwear maker On and Under Armour Inc. each told analysts that they were in a discount-heavy sales environment. Nike isn’t due to report its fiscal first-quarter numbers for several weeks.
“We have been clear that Nike’s turnaround will not be linear,” a company spokesperson said in an emailed statement. “Successful brand-led turnarounds follow an important sequence: stabilize, reset, then grow. We are focused on executing that plan and creating sustainable long-term value for shareholders.”
Wall Street is largely divided on the outlook for Nike, which has 16 buy-equivalent ratings to go along with 24 holds and four sells. The stock’s average price target implies a 28% jump from where the shares closed on Tuesday, according to Bloomberg-compiled data, but the stock has been downgraded by at least a dozen brokers this year.
The most recent cut came from Truist Financial Corp. on Wednesday, which dropped its recommendation to hold from buy. Analyst Joseph Civello said he’s “incrementally cautious” on Nike following Tuesday’s earnings report from Dick’s, which highlighted “deteriorating trends” in its footwear business.
Nike, which is Dick’s largest vendor, accounted for approximately 31% of consolidated merchandise purchases within the Dick’s and Foot Locker businesses, according to the retailer’s latest annual filing from March. “No other vendor represented 10% or more of our fiscal 2025 merchandise purchases,” Dick’s said in the report.
After it reports earnings, Nike has another opportunity to impress Wall Street with an investor day in November, where analysts and shareholders alike will want to hear about how the turnaround effort is going. Michael Obuchowski, chief investment officer at Merlin Asset Management, says investors are looking for sustained sales growth before piling back into the shares.
“They have to show that they have innovative products that can compete with all the newcomers,” he said.
(Adds Nike’s intraday trading.)
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