Nike has indeed experienced a very difficult period recently. As of May 2026, Nike's stock price has fallen about 75% from its peak in 2021, recently hitting its lowest level since 2014.

The reason it has "been leading the decline" is mainly because Nike has been caught in a "triple whammy" of strategic mistakes, declining performance, and deteriorating internal and external environments:

Three Major Strategic Mistakes (Backfiring Effects)

Excessive withdrawal from wholesale channels: The former CEO decided to withdraw and fully implement a direct-to-consumer model. This resulted in a decline for Nike in physical stores, giving Adidas, Hoka, and On Running an opportunity to seize the market.

Lack of innovation: In recent years, Nike has overly relied on reissuing classic models, with insufficient investment in innovation in high-tech fields like professional running shoes, leading to a weakening of its core competitiveness in the professional sports market.

Brand positioning confusion: Several marketing campaigns caused controversy in the North American market, leading to the loss of some core customers, while the loyalty of new customers failed to make up for it in time. Rise of local brands: Chinese consumers' recognition of other domestic brands has significantly increased.

Geopolitical tensions and tariffs: Affected by geopolitical tensions and tariffs, Nike's revenue in the Chinese market recently experienced a sharp double-digit decline, and this trend is expected to be difficult to reverse in the short term.

Earnings Report "Bomb"

Extremely pessimistic guidance: In its latest earnings report (Q3 FY2026), Nike lowered its future guidance, warning that sales this quarter will continue to decline by 2%-4%, and gross margin will continue to shrink due to inventory clearance and rising costs.

Massive layoffs: In just the first four months of 2026, Nike has already laid off about 14,000 people, which is seen by the market as a signal that the company is deeply mired and has to "stay alive" by cutting expenses.

Technical reference for investors:

If you are observing the stock price trend, you can pay attention to the following key points:

Valuation regression: Nike's current valuation level has reached a historical extreme low. Some analysts believe this may be a "once-in-a-decade" bottom, but others worry it could become a "value trap."

Leadership change expectations: The market is currently pinning its hopes on new CEO Elliott Hill's "Win Now" transformation plan, watching to see if he can successfully repair relationships with wholesalers and reignite product innovation.

Key support: From a technical perspective, the $30 - $40 range is a very strong long-term psychological support level.

Personal advice:

Nike's current decline is not a simple correction, but the growing pains of a business model reshaping. Before signs of a profit margin recovery are seen by the end of 2026, the stock price may remain in a weak, volatile state. If your friend holds this stock, they may need a great deal of patience to wait for its "second startup" to succeed.

The World Cup is Nike's most important "lifeline" in 2026.

If marketing during the World Cup is successful and the product strength is recognized by the public, Nike could likely use this opportunity to achieve a "V-shaped reversal." But if it cannot outperform cross-border competitors like Adidas or Lululemon even when playing at home, investor confidence may further collapse. Nike now is like a star player just returning from injury; the World Cup is his comeback match. A good performance can return him to the peak, but a poor performance might really lead to the market "cold-shouldering" him.