Nike closed at $39.09 on Monday, down 4%, marking its lowest close since September 2014. The Dow component is now about 78% below its all-time high of $177.51, which it reached in November 2021.

The latest decline was partly triggered by On Holding's second-quarter revenue miss. The Swiss sportswear company reported $1.076 billion in revenue, below the $1.11 billion forecast, adding to concerns about demand in the premium sneaker market. On and Deckers' Hoka brand have been among the fastest-growing challengers to legacy sportswear brands in recent years, which is why their results are watched as a read on the broader premium footwear segment.

However, Nike's challenges extend well beyond one competitor's results.

China remains the central issue. Nike's Greater China revenue for fiscal 2026 fell 11% year-on-year to $5.85 billion. Excluding currency effects, the decline was 13%. Direct online sales in China dropped 29%, shoe sales fell 14%, and Greater China operating profit declined 20% to $1.28 billion.

Local brands such as Anta Sports and Li-Ning have been gaining market share — Anta has grown into one of the world's largest sportswear groups by revenue — while the premium once associated with U.S. brands in China has been fading.

Nike's direct-to-consumer strategy has also come under pressure. Nike Direct revenue declined 6%, and brand digital revenue fell 12%, even as wholesale revenue increased 6%. The strategy, which Nike accelerated during the pandemic-era boom in online shopping by cutting back wholesale accounts in favor of its own apps and stores, was designed to improve margins but has instead weighed on overall growth.

Nike's fiscal year ends in May, so the fourth-quarter results cover the spring period. Revenue fell about 1% to $11.0 billion. Digital sales dropped 26%, and Nike is guiding for first-quarter revenue to decline by a low- to mid-single-digit percentage. Earnings growth is expected to remain flat once tariff recovery benefits fade. Nike produces most of its footwear and a large share of its apparel in Vietnam, Indonesia and China, which has left it exposed to higher U.S. import costs.

Wall Street has become more cautious. JPMorgan cut NKE to "underweight" from "neutral" earlier this month and lowered its price target to $40 from $47. Evercore ISI analyst Michael Binetti said there are "no hints yet that revenues can turn positive in the foreseeable future" and added that there is little reason to expand the P/E ratio from current levels.

Chief Executive Officer Elliott Hill, a longtime Nike executive who took over as CEO in October 2024 after John Donahoe's departure, has been working to repair wholesale relationships after years of an aggressive DTC strategy. He recently replaced Nike's CFO as part of a broader management shake-up.

A Stocktwits poll found that 68% of investors chose Nike over Lululemon as the stronger turnaround bet, even though both stocks are near multi-year lows.

Wall Street's average one-year price target for Nike is $50.66, which would imply upside from current levels. The stock carries a forward dividend yield of 4.03% — a level pushed higher by the falling share price — and a P/E ratio of about 19.35.

Hill acknowledged the pressure facing the company, saying: "I'm so tired, and I know you are too, of talking about fixing this business."

LeBron James, a longtime Nike endorser, recently said the brand needs "to go back to its roots" to reconnect with local communities and younger consumers.

Nike's next earnings report, covering its fiscal first quarter, is scheduled for September 29, 2026.