Nike closed its first fiscal quarter with a number it did not want to show the market. Sales came in at $11.2 billion for the three months ended August 31, short of what analysts had expected, and the company blamed weakness in its apparel business and the Jordan brand for the miss.
The damage did not stop there. Nike said it expects revenue for the full fiscal year to decline by a high-single-digit percentage, a forecast that strips away whatever hope investors had held for a quick recovery. The shares, already down more than 40% this year, fell about 6% in after-hours trading on Thursday, putting the company on course for its fifth straight year of annual decline.
The numbers land squarely on Elliott Hill, the chief executive who is about to enter his third year running the company. Hill was brought back in part to restore the brand’s standing with retailers and to fix a product pipeline that had leaned too heavily on a handful of franchises. Two years in, the results suggest the turnaround is still waiting to show itself.
The Jordan brand is the more pointed problem. It has been one of Nike’s most reliable engines for decades, a line that turns sneakers into objects of loyalty and resale. Softening demand there touches something deeper than a quarterly miss; it suggests the cultural pull that carried the brand is not converting into sales the way it once did. The apparel business, meanwhile, has struggled against a crowded field of competitors selling directly to consumers at lower prices.
The competitive field has shifted under Nike’s feet. Newer brands built on running and on direct sales to consumers have taken share in categories Nike once owned, while the sneaker market has fragmented across a wider set of names. Against that backdrop, a miss in Jordan and in apparel reads less like a single weak quarter and more like the continuation of a longer slide in relevance.
Hill’s task has been to undo parts of the strategy his predecessors built. Nike spent years pulling products out of wholesale channels and pushing buyers toward its own stores and apps, a move that ceded shelf space to rivals. Rebuilding those relationships takes time, and the payoff does not show up in a single quarter. The problem is that investors have been waiting through several quarters already.
Hill’s return in the autumn of 2024 was itself an admission that the previous strategy had failed. He had already retired from the company when he was called back to replace the chief executive who had overseen the retreat from wholesale. His first moves, putting product back on retailers’ shelves and rebuilding relationships that had been neglected, were widely read as the right ones. The open question is how long they take to show up in the income statement.
The stock’s slide tells the story in its own terms. Five straight years of annual decline is a long time for a company that spent most of the past half-century as the defining name in athletic wear. The after-hours drop on Thursday was a reminder that the market has stopped giving Nike the benefit of the doubt on promises of a rebound.
Analysts have been cutting expectations, and the company’s own guidance now points lower than many of them had modeled. A high-single-digit revenue decline for the year would mean Nike is shrinking at a time when its rivals are still growing, however slowly. The gap between Nike and the rest of the industry is the figure the next few quarters will be measured against.
The international picture adds another variable. Nike’s China business has been uneven, and a strong dollar has pressured the value of overseas sales once they are translated back into the company’s reported numbers. None of that is new, but it means the turnaround has to be built against headwinds the company does not fully control.
There are still levers Hill can pull. Inventory control, a tighter product calendar and a renewed focus on performance running have all been part of his plan. But a company of Nike’s size does not turn on a product or two; it turns when the full assortment, from running shoes to Jordan releases to apparel, moves in the same direction. For now, the pieces are not aligned.
The market’s verdict this week was blunt. Nike can still command a premium on its history and its logo. What it cannot yet command is confidence that the numbers are about to improve. Hill enters his third year with the calendar running against him, and the next set of results will be read as the clearest test yet of whether the turnaround is real or still just a plan.
