Nike’s turnaround is taking longer than expected, and one major Wall Street firm is becoming more pessimistic.
Nike shares dropped on Friday after Bank of America downgraded the stock. The downgrade was due to worries about weak product innovation, falling wholesale revenue in North America, and lower consumer demand in China. Bank of America also cut its price target for Nike.
Bank of America is not the only firm with a negative view. FactSet reports that the number of analysts with a bearish outlook on Nike is now at its highest in at least 30 years, based on Dow Jones Market Data. This is a big jump from earlier this year, when fewer analysts were pessimistic.
Investor confidence has also dropped. Nike shares have fallen sharply this year and have done much worse than the overall market. Nike did not respond to a request for comment.
Nike’s turnaround plan, called the Win Now strategy, has struggled to make progress. Since Elliott Hill became CEO in 2024, Nike’s shares have dropped a lot, according to Dow Jones Market Data.
Nike is still facing a tough market, as shoppers are spending less on non-essential footwear. Bank of America pointed out that sales of Nike’s classic sneakers have dropped worldwide, and new products have not made up for these losses.
Nike is also dealing with too much inventory. In North America, which used to be a strong market, retailers bought a lot of stock that is now selling more slowly than expected. As a result, stores are ordering less. Bank of America also noted that demand for athletic clothing in China, Nike’s biggest international market outside the U.S., is weakening as local Chinese brands become stronger competitors.
Bank of America also said that Nike has cut back sales through some third-party online channels in China to protect its brand. This move will likely mean more discounts and put more pressure on profits in the near future.
Even without the problems in China, Bank of America said Nike would still face challenges. Its classic shoe lines are losing momentum, and retailers are more careful about ordering new products. Nike’s shares peaked in late 2021, thanks to strong direct-to-consumer digital sales, but have dropped sharply since Hill became CEO in 2024.
