Key Points
Nike lost its footing when it cut wholesale partnerships and didn't focus on sports innovation.
The new CEO is leading a turnaround, and there has been some progress.
Nike's dividend yields 4.3% at the current price.
Nike (NYSE: NKE) is the largest athletic apparel and footwear company in the world, by far. However, although it's still the leader, cracks are letting in competitors, and it no longer controls the market.
Nike investors have noticed, and the stock now trades about 79% off its high and down 35% over the past decade. That suggests massive disappointment. What's going on?
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Keeping its top spot
Nike management wasn't reading the room and made a few missteps a few years ago that are still impacting it today. There were several converging factors, as there usually are in these cases, but the main ones were cutting off wholesale relationships and relying too much on its storied franchises.
Image source: Nike
Together, this was a lethal combination because customers looking for great sportswear options weren't even seeing Nike in stores. Management was too confident in its leading position and fan loyalty, but consumers ended up finding competing brands like Hoka (owned by Deckers Outdoor) and Brooks (owned by Berkshire Hathaway) in other stores. The company has a new CEO, and it's now winding its way back to wholesale partners and innovation.
So far, there are glimmers of a rebound, but performance is still under pressure. In the 2026 fiscal fourth quarter (ended May 31), revenue was down 1% year over year, driven by a 4% increase in wholesale. That's a positive development, and it's been trending that way over fiscal 2026. It's definitely headed in the right direction, but there's more work to be done.
In the meantime, the dividend yields 4.3%, which is a great benefit for shareholders who have held on. But new investors shouldn't expect a quick turnaround for Nike.
Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway, Deckers Outdoor, and Nike. The Motley Fool has a disclosure policy.