Nike share price cracks 9% to hit five-year low after Q4 sales drop 17%; Mcap below $100 billion for first time

Nike Share Price: Nike Inc. shares tumbled over nine per cent on Friday to hit a five-year lower, sending the sportswear giant’s market value below $100 billion for the first time since the Covid-19 pandemic after its earnings report signalled that revenue and profitability would remain under pressure.

Nike shares slid as much as 9.3 per cent to hit the lowest level since March 2020, the onset of the pandemic. Friday’s drop erased roughly $9 billion in value, giving the company a market capitalization of $97 billion. Nike shares have declined in the session after earnings for six straight quarters.

Also Read: Nike sinks 8% after pulling annual forecast amid low sales ahead of new CEO’s arrival, stock down 18% YTD

The stock is down more than 60 per cent from its record high in November 2021, when the company’s market value was around $281 billion. The warning of another quarter of sales decline sparked worries about the pace of a crucial turnaround at the sportswear giant under new CEO Elliott Hill.

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Nike predicted further revenue and profitability declines in the current quarter due to an ongoing merchandise reset that it says is necessary to revive growth. The company, which has manufacturing locations in China and Mexico, said its outlook is grim and reflects the estimated impact of newly implemented tariffs on imports from those countries.

Also Read: Nike withdraws annual forecast, signals weak holiday season

The fiscal quarter report was the latest in a string of disappointing updates from Nike, which has been grappling with a sales slump that began under previous CEO John Donahoe. Still, some Wall Street analysts are confident that CEO Elliott Hill, a longtime Nike executive who came out of retirement to take the top role in October, is the right leader to guide the company back to growth.

On Thursday, the company forecasted a steeper-than-expected drop in fourth-quarter revenue and also reported a 17 per cent slump in quarterly sales in China amid weaker discretionary spending in the country.

Hill—who took on the role to help the company regain lost market share—has laid out what he calls a "Win Now" strategy, which includes boosting on-the-ground presence in five key cities, such as Shanghai and Beijing.

Nike's chief financial officer, Matthew Friend, also said it would take "several quarters" to clear out its dated stock, which would involve margin-hitting discounts. The Dow component's shares hit $65.17 in early trading on Friday.

Nike's market cap has lost five per cent of its value so far this year following a 30 per cent plunge in 2024. Hill has fast-tracked certain sneaker launches, such as Pegasus Premium and Vomero 18, which helped Nike post a smaller-than-expected drop in quarterly revenue and profit.

Also Read: Nike withdraws guidance ahead of new CEO taking over

Still, Nike is working to move past previous management's strategy missteps, which led to a lack of innovation in its product lines. The shares of the sportswear major have shed 11 per cent since Hill's CEO announcement in September, giving up all the gains following his appointment.

The new management is also trying to rebuild relations with other retailers weakened by its focus on selling directly via its own stores and website. Barclays analysts projected the earliest they foresee a turnaround is in the second half of Nike's fiscal year ending May 2026. Nike's forward price-to-earnings ratio for the next 12 months, a benchmark for valuing stocks, was 30.08, compared with 17.33 for Deckers and 25.91 for Adidas.

With inputs from Bloomberg and Reuters