NKE Stock Trails S&P 500 By Widest Margin In 25 Years – Can Elliott Hill’s Turnaround Effort Change Narrative?

Nike is struggling after a twenty-five-year market underperformance caused by strategic missteps, weak product innovation, and China challenges.

• Nike has underperformed the S&P 500 for nearly 25 years, losing over 40% of its value since its 2021 peak. 
• Nike’s focus on direct online sales improved its digital business but weakened relationships with retail partners and reduced store presence. 
• CEO Elliott Hill is rebuilding Nike’s wholesale network, investing in performance products and simplifying operations through restructuring. 

Nike Inc. (NKE) stock has delivered its weakest relative performance against the S&P 500 in roughly 25 years, as strategic missteps in digital sales, wholesale distribution and product innovation erased billions in market value. CEO Elliott Hill is now attempting a turnaround centered on retail partnerships and renewed investment in performance-focused products. 

Nike’s Historic Underperformance

Nike has fallen dramatically behind the broader U.S. stock market, marking its weakest relative performance against the S&P 500 in roughly 25 years, according to Barchart data. After reaching a record high in November 2021, the athletic apparel giant has shed over 40% of its market value as a series of strategic decisions weakened its competitive position and allowed rivals to gain market share.

Nike's long decline shows how major changes in sales strategy, fewer new product launches, and changing customer preferences can weaken even a market leader. Under CEO Elliott Hill, who returned to lead the company, Nike is now working to turn its business around through wide-ranging organizational and operational changes.

Nike’s Direct-To-Consumer Strategy Hurt Its Competitive Edge

Under former CEO John Donahoe, Nike leaned toward selling directly through its own website and apps to boost profits. However, this reduced its dependence on retail partners and limited the brand’s presence in physical stores. 

Retail shelf space previously occupied by Nike products was increasingly filled by competitors such as Deckers Outdoor (DECK), whose Hoka brand expanded rapidly, along with other performance-focused footwear companies.

The strategy helped Nike grow online sales and profits at first, but problems emerged when demand weakened and unsold inventory increased. The company relied heavily on popular sneakers like Air Jordan, Air Force 1 and Dunk instead of creating more new performance shoes. As these older styles became widely available, Nike offered more discounts, which reduced profits. Nike is now rebuilding retail partnerships while making its digital business more focused on premium shopping experiences. 

Nike stock edged 0.5% higher overnight, heading into Wednesday. The stock has begun August in the red, with a 6% decline. 

Elliot Hill’s Turnaround Plan Takes Shape

Hill has responded by rebuilding relationships with wholesale partners, reorganizing leadership, and directing more investment toward performance categories such as running, basketball and football. The company's "Sport Offense" restructuring is designed to simplify decision-making while ramping up product development.

Nike also slashed about 1,400 jobs worldwide as part of its "Win Now" restructuring plan to simplify operations and support its turnaround strategy. Most layoffs affect technology teams across North America, Europe and Asia. The company is also consolidating tech operations, automating parts of its business and reorganizing supply chains. 

During the fiscal fourth-quarter earnings call, Hill said weak product sales have increased discounting and hurt future wholesale orders, while lower consumer spending has further pressured demand. He said the company is focusing on improving its product lineup, brand strategy and retail partnerships to support long-term growth. 

China Remains Nike’s Biggest Swing Factor

Nike will shift online sales in China to its official website, app and flagship stores on Tmall, JD.com and Douyin starting in 2027, phasing out many third-party online sellers. The move comes as the company faces rising competition and a 12% drop in Greater China revenue during Q4.

On Tuesday, JPMorgan downgraded Nike to “Underweight,” warning that changes to its China digital strategy could pressure future revenue and profits. The firm expects Nike’s “Win Now” plan to create headwinds through fiscal 2028, including a potential $1 billion revenue impact in China.  

For fiscal 2026, Nike reported revenue of $46.4 billion. Earnings per share received a boost from a one-time tariff-related recovery. Wholesale revenue rose 6% from 2025, showing that Nike’s renewed focus on retail partnerships may be starting to work.

NKE Stock: Retail Traders Turn Bullish

On Stocktwits, retail sentiment around the stock jumped to ‘bullish’ from bearish’ territory the previous day. 

A user said, “They're trying so hard and so obvious to knock this down.”

NKE stock has cratered 34% year-to-date. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.<