Nike shares have declined by 47% since the beginning of 2025, making the company the worst performer on the Dow Jones index by mid-September. Over the last 12 months, the stock has fallen by nearly 55%. The company reported a 4% revenue decline in the most recent quarter and projects a high-single-digit drop for the current fiscal year.
Retail expert Jan Kniffen suggests that AI shopping agents may further threaten legacy brands like Nike by prioritizing competitors such as Hoka or On based on price and fit. While Nike has attempted to adapt by integrating sales into Google Gemini and AI Mode search features, there remains a risk that automated systems will favor rival products over established names.
Operational challenges persist as Nike reports that its performance products are currently insufficient to offset broader losses. Sales in the sportswear category dropped by a low-double-digit percentage, while revenue in Greater China fell by 26% when excluding currency fluctuations. CEO Elliott Hill confirmed that the company plans to initiate layoffs starting in 2027.
Analysts at Citi have characterized Nike as a company focused on cost-cutting measures. Despite these difficulties, some observers note that brand inertia may provide temporary protection, as many consumers continue to search for Nike products by name. Meanwhile, retailers like Walmart are being highlighted for their extensive use of AI across supply chains and warehouses.
