Nike Stock Slides as Turnaround Struggles Persist Despite North America Growth

Nike closed at $35.75 on Friday, September 25, a fresh multi-year low, after Bank of America analyst Lorraine Hutchinson downgraded the stock to Underperform from Neutral and cut her price target from $47 to $30, warning that the athletic brand's turnaround is now unlikely to show up until fiscal 2028. The call landed six days before Nike reports fiscal first-quarter results on October 1, and it crystallized a frustration that has been building all year: North America keeps growing, Greater China keeps shrinking, and the net effect keeps leaving the stock lower. Shares are down roughly 53% over the past year and about 78% from their November 2021 peak, even as management points to real progress in performance categories and a new commercial chief brought in from Walmart. This piece walks through what Nike's most recent results actually showed, why Wall Street has turned decisively more skeptical this week, where the chart stands ahead of earnings, and how bulls and bears are reading a turnaround that keeps getting pushed a year further out.

 

 

 

Nike's most recent full quarterly report, for fiscal Q4 2026 ended May 31, showed the same pattern that has defined the past year: North America improving, China deteriorating, and the total picture roughly flat. Revenue came in at $10.97 billion, down 1% on a reported basis and down 4% currency-neutral, but ahead of the $10.86 billion LSEG consensus. Adjusted earnings per share of $0.20 beat the $0.13 analysts expected. Reported diluted EPS was $0.72, but $0.52 of that came from an expected recovery of IEEPA tariff claims, a one-time benefit that also inflated reported gross margin to 49.2%; excluding it, gross margin was 40.2%, down just 10 basis points from a year earlier and better than Nike had guided. Full fiscal year revenue was $46.4 billion, essentially flat on a reported basis, with full-year EPS of $2.10 reported or $1.58 excluding the tariff benefit.

The regional breakdown is where the story lives. North America grew 3% in the quarter, with wholesale revenue up 10% and Nike posting its first positive Foot Locker comparable sales in four years, alongside a fifth consecutive quarter of double-digit growth in Nike Running, which management said added nearly $1 billion in revenue. Greater China fell 17%, with Nike Direct down 14%, wholesale down 19%, and segment profit down 20%, as the company continues what it describes as a multi-quarter marketplace reset. EMEA fell 6% and Converse fell 31%. CEO Elliott Hill's Sport Offense operating model, built around individual sports rather than broad categories, is the organizing framework behind the North America improvement, and the company highlighted a World Cup activation that sold 2.5 times the kit volume of the 2022 tournament. Separately, Nike named Jane Ewing, a 14-year Walmart veteran, as its new chief commercial officer, who started September 7, and the stock exited the S&P 100 index on September 21 while retaining its position in the broader S&P 500.

 

Nike shares had already drifted down through August and September, closing at a then 12-year low of $39.09 on September 1 and trading around $37 to $38 for much of the following three weeks. The decisive move came Friday, September 25, when Bank of America's Lorraine Hutchinson, who had defended the stock through most of 2026 on the view that bad news was already priced in, reversed that stance. She downgraded Nike to Underperform from Neutral, cut her price target to $30 from $47, roughly 17% below Friday's close, and told clients that "risks are rising." Her note pointed to a specific structural concern beyond the well-known China weakness: a growing disconnect between North America wholesale growth and actual sell-through rates at retail, meaning inventory is moving into stores faster than it is selling out of them, a dynamic that could leave retailers less willing to reorder. She also cited stalled sales in Nike's larger lifestyle categories, product innovation that has not fully connected with consumers, and a promotional retail environment. BofA cut its fiscal 2027 and fiscal 2028 EPS estimates by 11% and 12%, to $1.43 and $1.87, and pushed its expectation for a real recovery out to fiscal 2028, a full year later than previously modeled.

The downgrade did not arrive in isolation. Oppenheimer and Barclays had already lowered their Nike price targets earlier the same week, Citigroup cut its target from $45 to $39 in mid-September, and Deutsche Bank's target sits at $43. According to Bloomberg reporting cited in BofA's note, sell-side enthusiasm for Nike has fallen to its lowest level in at least 25 years. Notably, the market treated the selloff as specific to Nike rather than the broader athletic sector: shares of Dick's Sporting Goods ticked higher and On Holding, a direct rival in premium running, held flat on the news, a distinction sharpened by the fact that Kylian Mbappé left Nike after a 20-year relationship to sign with On Holding in the days just before the downgrade. Shares fell nearly 2% in premarket trading Friday before finishing the regular session down 0.67% at $35.75, a decline that itself understates how much sentiment shifted, since the stock had already priced in a large amount of bad news before Hutchinson's call arrived.

 

 

 

Nike's chart is, in a fairly literal sense, a multi-year decline that keeps finding new lows. The stock's all-time high close was $161.91, set on November 5, 2021, which makes Friday's $35.75 close roughly 78% below that peak. Over just the past five years, Nike has lost about three-quarters of its value, according to analysis accompanying the BofA downgrade coverage. The 52-week range now runs from a high of $76.97 down to a low near $35.09 to $35.22, depending on the data source, with Friday's close sitting barely above the bottom of that range. As of September 8, before the latest leg down, Nike's 200-day simple moving average stood at $38.42 and its 50-day average at $38.62, both levels the stock has since fallen through; those exact averages have almost certainly drifted lower since, but the stock has spent the weeks since then trading persistently below both.

Support is thin below current levels, since the stock is sitting at or near its 52-week low with limited recent trading history beneath $35. The next reference points down are round-number psychological levels rather than established technical floors. On the upside, resistance begins near $38.42 to $39.00, the zone that capped the stock through most of September before the BofA downgrade, with a further ceiling around $43 to $45, where Deutsche Bank's and Citigroup's price targets sit. Options markets are pricing an 8.3% potential swing around the October 1 earnings report, according to TipRanks, a wide implied move for a stock already trading near multi-year lows, reflecting how much uncertainty remains about which trend, North America's improvement or China's decline, will dominate the next print.

 

The bull case starts with the fact that North America, Nike's largest and most profitable market, is genuinely improving. Wholesale revenue in the region grew 10% in the most recent quarter, Nike posted its first positive Foot Locker comps in four years, and Nike Running has now delivered five consecutive quarters of double-digit growth, adding close to $1 billion in revenue on its own. At a trailing P/E of roughly 17.04 and a forward P/E of 21.72, the stock trades well below the mid-20s multiples it commanded in recent years, and bulls argue that a meaningful de-rating is already reflected in the price. The dividend yield of 4.59% offers some support for patient holders, and the new Sport Offense operating model and the hire of a experienced retail operator as chief commercial officer are concrete steps that could improve execution. Nike's own full-year results, while flat, beat consensus estimates on both revenue and adjusted earnings, and management has continued to defend the pace of its recovery even as the stock has fallen.

The bear case, and the one that has gained the most ground this week, is that the North America story is not as clean as the headline growth number suggests. BofA's core concern is that wholesale shipments into North America retailers are outpacing actual sell-through to consumers, which means the 10% wholesale growth could partly reflect inventory building rather than final demand, a gap that tends to resolve through order cuts down the line. Greater China remains in a structural decline, down 17% in the most recent quarter and expected to stay pressured, with JPMorgan separately warning that a China marketplace reset and rising tariff costs could weigh on earnings through fiscal 2028. Converse fell 31%, a steeper decline than either major region, and lifestyle categories broadly have stalled even as performance categories grow. The dividend itself has become a point of concern: Nike's trailing payout ratio sits around 72%, but measured against BofA's newly lowered fiscal 2027 EPS estimate of $1.43 against the current $1.64 annual dividend, the payout ratio would exceed 100%, raising the kind of sustainability questions that rarely resolve well for a stock already this beaten down.

 

The immediate catalyst is Nike's fiscal Q1 2027 earnings report on October 1, just six days after the BofA downgrade. The report will be the first real test of whether the North America wholesale and sell-through concern that drove this week's selloff shows up in the numbers, and whether China's decline is stabilizing or deepening. An implied options move of 8.3% is large for a stock already near its 52-week low, and a miss or weak guidance could push shares meaningfully below the $35 area with little established technical support beneath it. A beat, particularly one that addresses the sell-through question directly, could spark a relief rally given how negative sentiment has become, with Bloomberg's characterization of 25-year-low sell-side enthusiasm suggesting expectations are now quite low.

Beyond the immediate print, dividend sustainability is worth monitoring given the payout ratio math above, since any signal that Nike might slow its dividend growth rate, which has averaged 7.1% over the past three years, would remove one of the few things currently supporting the stock for income-focused holders. The China relationship also carries policy risk beyond ordinary demand cycles, given tariff dynamics that already produced the one-time benefit embedded in the June quarter's reported results and could just as easily reverse. Traders may want to treat the $38.42 to $39.00 zone as the level that needs to be reclaimed and held before treating any bounce as more than a relief rally, while using the 52-week low near $35.09 as the immediate line to watch on the downside.

 

Nike's turnaround is not fabricated. North America wholesale is growing, Nike Running has strung together five strong quarters, and the company beat estimates on both revenue and adjusted earnings in its most recent report. What has changed is Wall Street's patience for the pace of that recovery and its confidence that the North America growth is durable rather than inventory-driven. With Bank of America now modeling a fiscal 2028 recovery instead of a fiscal 2027 one, and with earnings due October 1 against an 8.3% implied swing, will Nike's next report show that North America's improvement is real demand rather than a wholesale-to-sell-through gap waiting to correct, or has the market only begun pricing in how long this turnaround will actually take?

 

A: Nike closed at $35.75, down 0.67%, after Bank of America downgraded the stock to Underperform from Neutral and cut its price target from $47 to $30, warning that Nike's turnaround is unlikely to materialize until fiscal 2028 rather than fiscal 2027 as previously expected.

A: Yes. In fiscal Q4 2026, North America revenue grew 3% with wholesale revenue up 10%, and Nike posted its first positive Foot Locker comparable sales in four years. Bank of America's downgrade specifically warned, however, that wholesale shipments may be outpacing actual sell-through to consumers.

A: Greater China revenue fell 17% in fiscal Q4 2026, with Nike Direct down 14%, wholesale down 19%, and segment profit down 20%. Nike describes this as an ongoing multi-quarter marketplace reset, and JPMorgan has separately warned the region could pressure earnings through fiscal 2028.

A: Nike reports fiscal Q1 2027 results on October 1, 2026. Options markets imply a potential 8.3% post-earnings stock swing, according to TipRanks, reflecting elevated uncertainty about whether North America's growth or China's decline will define the report.

A: Nike's all-time high closing price was $161.91, set on November 5, 2021. At $35.75, the stock is down roughly 78% from that peak and has lost about three-quarters of its value over just the past five years.