Nike's Turnaround Efforts Face Test as Stock Plummets to 12-Year Low

Nike's stock price plummeted by about 8% on Friday after the sportswear company released another disappointing outlook. This decline brings Nike's shares to their lowest level in 12 years, reaching around $32.22.

The bigger concern is how long the recovery could take for Nike, which is still attempting a multiyear turnaround under CEO Elliott Hill. The company forecasted steeper-than-expected declines in sales and profit for the fiscal year ending in May 2028, further alarming investors. Additionally, Nike announced another round of job cuts.

Hill has been working to rebuild wholesale relationships, shift product development back toward sports, and simplify operations. However, revenue continues to decline across both wholesale and direct channels. The Jordan brand, a significant contributor to Nike's sales, is also facing challenges due to oversupply and discounting, which have weakened the franchise's premium positioning.

The company's investor day on November 16-17 will be crucial in determining if investors will remain patient with Nike's turnaround efforts. Hill stated that stabilization of the China market could take multiple seasons, putting further pressure on profitability.