NEW YORK: Nike is struggling to regain momentum after years of weaker sales and rising competition, with CEO Elliott Hill’s turnaround plan facing fresh pressure from declining demand in China, weaker Jordan sales and the recent loss of football stars Kylian Mbappé and Lamine Yamal.
Nike reported quarterly revenue of about $11 billion, below analysts’ expectations, while revenue in China plunged 26%. The company expects revenue to decline by high single digits in the coming financial year as it works to reduce costs and rebuild demand.
The results highlight the scale of the challenge for Hill, a longtime Nike executive who returned from retirement to lead the company after years of strategic shifts weakened its position in parts of the global sportswear market.
Nike’s strategy loses momentum
Nike’s problems accelerated after the company moved aggressively toward direct-to-consumer sales under former CEO John Donahoe.
The strategy helped Nike benefit from a surge in online shopping during the COVID-19 pandemic. But as consumers returned to physical stores and spending came under pressure, the company faced weaker demand and strained relationships with traditional retailers.
At the same time, competitors such as On and Hoka expanded their presence in the footwear market, taking shelf space and attracting consumers with newer products.
Matt Powell, a veteran sports retail analyst and adviser, said Nike made several strategic mistakes, including cutting ties with some retailers and making limited-edition products more widely available.
“The more broadly available those shoes became, the fewer people were interested,” Powell said.
Powell also argued that Nike put too much emphasis on digital operations while product innovation received less attention.
Losing the stars that built the brand
Nike has spent decades using elite athletes to turn sportswear into culture, making the recent loss of major football stars particularly significant.
Mbappé ended his 20-year relationship with Nike in September and joined Swiss sportswear company On. The Real Madrid striker had been with Nike since he was 9.
Yamal also left Nike for Adidas, saying the move gave him an opportunity to stand out from Nike’s large group of star athletes.
Mbappé said his new partnership with On would surround him with “innovators” who shared his ambitions.
Tim Derdenger, an academic specializing in marketing and strategy, said athletes increasingly want partnerships that allow them to help shape a brand’s identity.
Nike’s history shows how powerful such relationships can be.
The Jordan gamble changed Nike
In the 1980s, Nike made a major investment in a young basketball player who had not yet played an NBA game: Michael Jordan.
The company built the Air Jordan line around him, helping turn both the athlete and the brand into global cultural forces. Nike later formed partnerships with stars including Tiger Woods, Serena Williams and Cristiano Ronaldo.
Jordan remains closely associated with Nike, while Williams and Ronaldo remain part of its athlete roster. Woods ended his partnership with the company in 2024.
But Derdenger said Nike cannot rely solely on its past successes.
“It's not the future and it's not the current and that is what drives apparel sales today,” he said.
Nike still has major athletes such as Rory McIlroy and Vinicius Junior, but the departures of Mbappé and Yamal have increased attention on how the company develops its next generation of stars.
China and Jordan remain weak spots
China has emerged as one of Nike’s biggest challenges.
Revenue in the market fell 26% in the latest quarter, adding to pressure on a business that has struggled with weaker consumer demand.
Nike’s Jordan brand also reported lower global sales. Hill said the company had been oversupplying Jordan products and would reduce the number and frequency of releases.
Nike expects to save $2.5 billion by 2031 as part of its restructuring plan, with some savings expected to come from job cuts.
Chief Financial Officer Dave Denton acknowledged that the company’s recent performance has fallen short of its expectations.
“Our results are below both our expectations and our potential, and we are focused on closing this gap,” Denton said.
Nike shares fell more than 8% in extended trading after the earnings report.
Can Nike rebuild its edge?
Despite its struggles, Nike remains one of the world’s most recognizable sportswear brands, with a huge global customer base and decades of influence in sports and popular culture.
Hill’s turnaround strategy, known as “Sport Offense,” is focused on strengthening Nike’s sports business, rebuilding its Jordan brand and improving performance in China.
The company has also targeted younger consumers through its “Why Do It?” campaign, a follow-up to its iconic “Just Do It” slogan.
Powell said Nike could return to growth and profitability but warned that rebuilding product innovation would take time.
For Nike, the challenge is no longer simply protecting its place at the top of sportswear. The company must regain product momentum, reconnect with younger consumers and convince a new generation of athletes that the Swoosh is still the brand to wear.
