Getting Nike Back on Track Could Take Years

It’s no secret that aren’t a god-like powerhouse anymore, but it’s somewhat looking up following their latest revenue results. It was originally expected that the Beaverton HQ were to post the steepest revenue decline in almost five years in their latest quarterly results. However, Nike have beat the expectations of analysts and done better-than-expected in first full quarter as CEO.

There are several factors contributing to the decline, including cost of living, geopolitical dynamics, volatile foreign exchange rates and tax regulations. According to the , Nike app downloads are down by 35 per cent from last year, with Team Swoosh’s brick-and-mortar foot traffic down by 11 per cent. Discounted products have also contributed to the decline in revenue, with Foot Locker (where Nike makes up 60 per cent of their offerings) reporting hurt profit margins thanks to cut downs on Swoosh product. Nike were initially said to post a revenue decline of around 11.5 per cent for the third quarter to $11.01 billion, which would have been the biggest fall since lockdowns in 2020. Investors told Reuters that they were looking for details on Nike’s efforts to rebuild relationships with retailers and sell through unsold stock. Defying Wall Street’s predictions though, Nike’s revenue actually fell 9 per cent to 11.3 billion. New CEO Elliott Hill, who took to the stage in October, has been credited with this as he guides the sportswear giant through a rough year that’s seen mass layoffs and falling sales.

‘[Nike] needs to create a whole new franchise, like a family of products that add billions in sales,’ Morningstar analyst David Swartz told BoF. ‘That takes years’.

With Hill at the helm, Nike are primed for a comeback, with the new CEO positioning sport at the centre of the brand. However, turning a ship as big as Beaverton is easier said than done. There have been plenty of steps in the right direction though, such as the launch of the and new . There’s also been Nike’s heavy focus on female athletes, they had their first Super Bowl commercial in almost three decades, and the announcement of the .

‘It will take time to reach the volume to replace the handful of classic franchises we over-indexed on, but our approach is simple,’ said CEO Elliott Hill. ‘Help consumers fall in love with something new from Nike, and that something is not replacing one icon for another.’

Nike are expected to take back lost market share, with insiders saying that the company's problems have been over exaggerated according to CNBC. However, due to economic strife and new tariffs, they do recognise that the turnaround could take longer and be more difficult than originally expected.