Nike (NKE) Is Down 40% YTD: Will the Turnaround Strategy Work?

Nike (NKE) Is Down 40% YTD: Will the Turnaround Strategy Work?

Thu, September 17, 2026 at 6:32 PM GMT+3 3 min read

• NKE +0.07%

On September 15, Telsey Advisory Group cut its price target on NIKE, Inc. (NYSE:NKE) from $47 to $44 and maintained its Market Perform rating on the stock. The research firm noted that the company's turnaround is moving slowly and even as the company is taking steps in the right direction by focusing more on sports and rebalancing its product portfolio, sales trends remain weak.

Telsey Advisory Group pointed to weakness in sportswear, international markets, and NIKE, Inc.'s (NYSE:NKE) direct-to-consumer channels. The firm does not expect these trends to improve meaningfully until fiscal 2028. It also expects the shares to remain range-bound until investors have more visibility into the company's ability to return to sales growth and operating margin expansion.

This update comes ahead of the company's first-quarter fiscal 2027 results, which the company plans to report on October 1, 2026.

Turnaround Faces More Challenges

NIKE, Inc. (NYSE:NKE) has faced a steep decline since reaching its peak in 2021. Shares have fallen nearly 80% from that level, which translates to a loss of more than $200 billion in market capitalization. As of September 15, the stock was down more than 40% year-to-date.

The company is also losing its place in the S&P 100 after an 18-year run. S&P Dow Jones Indices said NIKE, Inc. (NYSE:NKE) will be removed from the index effective September 21.

As part of its Win Now turnaround plan, the company has introduced cost cuts and adjusted its strategy to create a better balance between its wholesale and direct-to-consumer businesses. NIKE, Inc. (NYSE:NKE) is working to rebuild its wholesale channels while increasing investments in teams and athletes to strengthen loyalty and repeat customers.

The results for fiscal 2026, which ended on May 31, show why the turnaround remains challenging. NIKE, Inc. (NYSE:NKE) reported $46.4 billion in full-year revenue, which was flat on a reported basis. Wholesale revenue 6% year over year on a reported basis and 4% on a currency-neutral basis, driven mainly by growth in North America. Several pressures continue to weigh on the business, including competition, current operating trends in consumer discretionary spending, and the slowdown in China.

Hedge Fund Interest

Hedge fund interest in the stock has also weakened. According to Insider Monkey's database, 56 hedge funds held positions in NIKE, Inc. (NYSE:NKE) in the second quarter of 2026, down from 71 in the first quarter.

Meanwhile, as of August 31, short interest stood at 7.92% of the company's float, indicating some level of bearish positioning in the stock.

With no clear catalyst supporting renewed growth, NIKE, Inc.'s (NYSE:NKE) upcoming results and management's commentary on the turnaround will be important in determining whether the company's strategy is working as intended. The October 1 earnings report could give investors a clearer indication of whether the 'Win Now' strategy is gaining traction or whether the recovery will take longer than expected.

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