Nike Stock Tumbles 77%, But Turnaround Strategy Shows Promise

Nike's stock has plummeted 77% from its peak in late 2021, and is currently trading at $35.75. The company's biggest challenge is China, where revenue fell 12% in the last quarter due to increased competition from Chinese-based brands.

Nike is taking steps to combat this trend by rebuilding its wholesale relationships, reducing excess inventory, and focusing on key sports, locations, and specific cities.

The athletic apparel giant's balance sheet remains strong, with $9 billion in cash and short-term investments. Nike also continues to pay a quarterly dividend of $0.41 per share.

Management expects the gross margin to begin expanding starting in the second quarter of fiscal 2027, marking a potential turning point for the company.